Two DWT payments lawyers, Gwen Fanger and Pete Johnson, attended the Finovate conference in San Jose on May 12th and 13th. The Finovate conference focuses on FinTech innovations and is structured as a series of 7-minute, individual product demos over two days. More information can be found here. The conference was attended by early stage companies developing cutting-edge products, mature financial services companies launching innovative new products or looking to partner with or acquire emerging companies, and investors keeping an eye on industry trends to identify potential portfolio companies.
While the products demoed ranged from personal financial services applications to small business lending products to B2B applications, a few trends emerged:
- API Driven Development and Reliance on Third Party Data Sources. Many of the products exhibited at Finovate rely heavily on APIs and on obtaining data from trusted third party sources. Rather than focusing on developing proprietary data sets, many of the presenters focus their development on building applications that allow customers to efficiently understand and use data compiled by others. For example, one company demonstrated a user authentication tool that draws information from multiple, third party sources and then displays the data in real-time in an easy-to-use format for financial institution customers.
- Democratization of Professional Services. The conference also highlighted a significant number of companies that are trying to democratize services for which consumers have historically paid significant professional services fees to intermediaries. These products generally bring more relevant and actionable information into consumers’ hands to allow consumers to drive their own decision-making processes. For example, one product allows unbanked consumers to access traditional bank services (i.e. a savings and checking account) and also to shop for and purchase vehicle, life and other insurance within a single interface.
- Disintermediation of Time-Intensive Processes. Another focus of the companies at the conference was the development of applications and platforms designed to replace time- and human-intensive processes in the financial services sector. These B2B products were targeted primarily at financial institutions which have continued to use historical underwriting and other traditional processes to take action on customer accounts. As an example, one company demoed a platform that allows credit managers to efficiently perform credit collections of distressed accounts based on the behavior of the individual borrower from an intuitive interface.
The products and companies showcased at the conference highlight once again that the adoption, development and acquisition of technology, the empowerment of customers through technology, and a willingness to disrupt historic processes will be critical to the future success of all financial services companies.