Changing Fintech for a Changing World

COVID-19 will forever change the way that people engage with the financial institutions that manage their money. In an effort to figure out what exactly that change will look like, I conducted a series of podcast interviews with fintech experts, strategists, and analysts. While the entire series is worth listening to (you can find it here), conducting all of those interviews has given me a unique take on what to expect for the future of fintech. What follows are some of my own big-picture ideas and predictions for the ecosystem based on these conversations.

For banks: a thinning of the herd

Let’s begin by pointing out what should be obvious to everyone at this point: the bank branch is dead. With massive amounts of the world’s population under some sort of stay-at-home order, for many people, there was no option but to take care of financial matters remotely through digital channels. Some governments are starting to ease restrictions which will make it possible for people to go back to bank branches again, but nobody expects that consumers will be as willing to come to a physical bank as they were just a few short months ago. It’s difficult to use an ATM without wondering whether the last person to use it washed their hands proficiently, let alone stand in a line surrounded by other people to wait to talk to a different person who will hand you some cash, which is likely covered in germs.  

Digital, cashless banking has never looked so enticing, a theory which is validated by the massive upturn in digital banking adoption (or “hockey stick” growth as Dan Latimore described it). This upturn is terrific for the banks (and the fintech that supports them) that have already spent a lot of time and energy updating and optimizing their digital experiences. That group tends to be made up of the larger, national (and multi-national) financial institutions, although it certainly contains some smaller, forward-thinking community banks as well.

Banks that hadn’t already prioritized digital transformation, though, are in serious trouble. Despite the writing that’s been on the wall for the past decade, many financial institutions never really engaged with tech to the degree that they should have. For those banks, COVID-19 marks the beginning of the end. It’s too late now to try to catch up, and we are about to see a dramatic thinning of the banking herd as banks that were unprepared for this get acquired or go out of business.

For fintechs: rising demand and growth, but higher stakes

On the fintech side of the industry, the picture is similar. Existing, successful fintechs are about to experience a period of unprecedented demand and growth. Just like with their banking counterparts, the initial hockey stick growth has proven to be a massive stress test, but for companies who passed that test, the future is looking rosy.

The flip side is harsher – fintech companies that hadn’t been able to get to scale, or who struggled to deal with the increased demand will likely fade into the background, pushed aside by the fintech “winners” who will come to dominate the space. Companies that had received venture capital funding before March will be under intense pressure to justify their positions in the fintech ecosystem, and if they can’t, they are likely to find further capital increasingly difficult to acquire.  

The ideas that I’ve outlined so far aren’t controversial among the experts with whom I spoke. Most of them agree that the number of banks will start to shrink, the number of fintech companies will start to shrink, and both the bank and fintech sides will see smaller pools of winners grow into more dominant positions. But when it comes to the question of what happens to early-stage startups in fintech, the water starts to get muddier.

Fintechs’ future: a shifting startup ecosystem

A strong startup ecosystem is vital for the long-term success of fintech. New, young companies push incumbents, introduce exciting new ideas into the space, and recycle top talent. Without them, the industry will stagnate and settle into complacency. So what can we expect?

Despite the obvious pain points, there are a few key pieces that suggest we’ll see some strong innovation from early-stage companies. To start, with contractions on the banking side and the fintech side, there will be some strong talent available for people with new ideas. We saw something like this a decade ago in the wake of the Great Recession, where ex-bankers with inside knowledge of the industry (and its inefficiencies) were able to partner with technologists, and create some really interesting innovations.

Another key point is that while overall funding in fintech companies might slow, there remains a good amount of capital that is currently looking for a home. It will probably be more difficult to get the same initial funding amounts that startups were able to get in the past few years, but that’s ok. (You could easily argue that a lot of startups didn’t need all the capital they had been getting anyway, and smaller initial rounds make successful exits easier to visualize.) There is still capital out there, and the VCs and investment bankers that I’ve spoken with expect to see more of that capital going to early-stage companies than mid-stage companies who haven’t already made a move towards unicorn status.

That said, there will likely be more stringent vetting as a part of the funding process, and there’s going to be more pressure on early-stage companies to deliver results sooner. Even before COVID-19 began sweeping the world, some highly publicized failures like WeWork have had the VC community rethinking how high of a valuation startup companies can really claim. Startups should expect to have to do more with less initially, but as long as they can demonstrate success, they will get the funding they need to bring their innovations to market.

A new reality

When you marry all of these factors together, a picture starts to emerge of what the future in fintech looks like. There will be fewer bank and fintech players in the space, an emerging group of “winners” on the fintech side, and a tougher grading rubric for those seeking capital. It’s going to be a harsher world, but that may ultimately be a good thing for the long-term success of the industry.

The rising tide that has been lifting everyone in fintech for the past few years is gone. As the water comes back down, not everyone will survive, but those that do will be in a much stronger place than they were at the end of 2019. And as the herd thins, there will be space for new companies who can succeed in a more challenging reality. There’s really only one thing that’s certain right now: the future will bring with it many challenges that will need to be met, which means that opportunity will be there for those prepared to take it.

Finovate Celebrates Women in Fintech

At Finovate, we believe that fintech has the potential to benefit people all around the world, helping with fundamental problems like access to capital, basic banking services, investment opportunities, and more. In order for fintech to make a difference on a global scale, though, it’s vital to get diverse opinions, experiences, and insights into the conversation. One group (though certainly not the only group) that’s consistently underrepresented in fintech is women, who face a slew of obstacles and challenges that their male counterparts don’t have to overcome.

This is a pain point which I’ve been aware of for my entire life. My mother spent her career working as a programmer for a variety of companies, and I grew up hearing about her experiences in a field dominated by males. Despite the obstacles she faced, she was able to rise through the ranks, and held management positions in some very large companies, including McKesson, Oracle, and Coors. Although I didn’t understand the full implications at the time, I remember hearing stories about interactions she had with male coworkers and employees that (justifiably) set her teeth on edge, and which are even more cringeworthy now that we’re 20 years further down the road.

While there has undeniably been progress made since she began her career in tech in 1985, it’s also undeniable that there’s a long way still to go. I still hear stories that echo her experiences 10, 20, or 30 years ago, and it amazes me that we’re not farther along than we are.

In honor of International Women’s Day today, we are going to be spending a week celebrating women in fintech with inspiring stories from female founders, influencers, and executives, who are helping to shape our industry. We’ll be posting daily updates on our Finovate.com blog, highlighting interviews with women on our Finovate Podcast and YouTube channels, and offering a week-long discount (see footer for details) for all of our 2020 events to help make our shows more accessible to women.

I hope you enjoy the programming coming up this week, and I hope to see the number of female speakers, founders, and attendees at our events continue to rise. In order for fintech to be for everyone, it needs to be from everyone, and we are committed to doing our part to create an inclusive, diverse ecosystem.


To promote the gender goal of 50/50 diversity in financial services, women who register by this Friday, March 13, can purchase a ticket to any 2020 Finovate event at a 50% discount. Just enter the code EQUALITY on the booking form.

Three Key Lessons We Learned from Plaid

Unless you’ve been living under a rock, you’ve probably heard that Visa is acquiring Plaid for a deal that’s worth $5.3 billion. Finovate’s own David Penn covered the story for us on Monday, and virtually everyone in the fintech space is talking about it.

What you might not know, though, is that Plaid was on stage at one of our events way back in 2014. At that point they were already well on their way – they were close to signing their 1,000th customer, and they had already signed companies from spaces like lending, payments, expenses and accounting, asset management, and PFM. In the years following their time on stage, we’ve seen countless demoing companies come across our stage who relied on Plaid to underpin their offerings from a wide variety of areas.

The fact that they were so widely used at such an early stage is a testament to the quality of their code, but there are also a few key lessons to take away from their success:

  1. A valuable tool can be worth more than what you build with it. The old saying goes something like “in the gold rush, it’s better to sell pickaxes than mine for gold.” That’s precisely what Plaid did, putting together a product that was attractive to a wide variety of fintech companies to capitalize on the massive wave of fintech startups that came through the last decade. Whether those startups survived or not, Plaid became a part of all of them, guaranteeing their own payday and removing the uncertainty that so many fintech startups faced.
  2. Simplicity is an asset. Plaid’s API is simple to understand,  install, and build on, which has made it attractive to developers from across fintech. This simplicity also means that the tech is highly versatile, floating easily from one field to another.
  3. Connections are vital. At the time that Plaid was gaining momentum, the API world was a very competitive one, with a lot of providers fighting to get adopted. The technology itself was very important, obviously, but so was the work they did in coming to events like FinDEVr to make sure that developers knew what their code could do. The ability to evangelize for your product is crucial to success, and building momentum frequently has to be done through face-to-face connections with influencers in the industry.

There are many more lessons to be drawn from Plaid’s example, but for innovators in the space, those three lessons seem the most important to me. Plaid’s connections, simplicity, and business strategy put them in a position to succeed and become the latest fintech royalty. Congratulations to them on their success, and the challenge is laid out for the rest of the industry to follow in their footsteps.

Top Three Action Items for FI’s from 2018

With FinovateAfrica officially in the books, Finovate’s 2018 calendar of events is now complete. While the next event (FinovateEurope, February 12-14 in London) is right around the corner, it’s worth taking the time to pause and assess what we learned over the 2018 shows. It’s never easy to condense one show down into a handful of concrete takeaways, let alone the full cohort of six. There are more angles and storylines than I could possibly do justice to here.

But over the course of our shows in Europe, America, the Middle East, Asia, and Africa, there were a few common threads that should shape every financial institution’s thinking for 2019. Here are my top three action items for banks and financial institutions based on the 2018 Finovate series:

  1. Focus on your customers. Over the past 12 months, we saw more companies win best of show with customer-experience applications than any other, which is a strong indicator that both innovators and financial institutions recognize the value of creating and maintaining positive customer interactions. Users’ expectations have been raised by tech giants and web retailers across the globe, and those expectations absolutely extend to the financial arena. Quality online account opening is a must, as is customer care, mobile money management, and customer-friendly payments. Fintech innovators have been working in this space for many years, but the industry as a whole took a big leap forward in 2018. The difference between leaders and followers in this area will be increasingly visible as the next year unfolds.
  2. Demand more from your core providers. One of the recurring themes over the past year has been the way that new fintech innovations are making themselves accessible to traditional technology stacks through the use of APIs or other easy-integration solutions. In fact, a new class of fintechs is emerging whose sole focus is around taking innovations and bringing them into the real world. As more and more innovators are taking real steps to make sure their products play nicely with others, it’s vital that every bank pushes on their existing technology providers to make sure they are ready to integrate well with new technologies. If your core providers can’t smoothly accommodate the new tech you’d like to offer, it’s time to put pressure on them. You may not know exactly what you want to update yet, but you already know you’ll want the flexibility to move quickly when you see something new that you like.
  3. Broaden your horizons. Fintech is breaking down barriers all over the world, and financial institutions who think big will reap the rewards. Fintechs are focusing on making services available to unbanked and underbanked populations in a wide variety of geographies, and for banks who feel like they have tapped out their potential customer bases, this should be a breath of fresh air. Opportunities exist all over the world, but don’t overlook what’s happening in your own back yard. It’s likely there are underserved demographics that you can target more efficiently and effectively than you currently are no matter where you are in the world. It can be scary to extend beyond your comfort zone, but if you don’t use technology to reach out for your share of the next generation of banking customers, it’s a sure bet that someone else will.

2018 has been an transformative year for fintech (and for Finovate), and I’m genuinely excited to see what 2019 has in store for us. Here’s to another great year of fintech innovation!

To get involved in any of our events as an attendee, presenter, speaker, or sponsor, reach out us at info@finovate.com

Fannie Mae Eases DTI Requirements – Forgetting the Past, or Embracing the Future?

This past Saturday (July 29), Fannie Mae implemented a change that’s been in the works for several months. Starting now, Fannie will be able to approve mortgages with a debt-to-income (DTI) ratio of 50%, which is up from the 45% limit that had previously been in place. This change will expand the pool of prospective borrowers for the mortgage giant by as many as 95,000 per year.

There are certainly arguments in favor of such a move. As the HousingWire article linked-to above says, a disproportionate number of those new borrowers are likely to be Latino and African American families, who are 1.5 times more likely to have DTI’s above 45%. Business Insider has also pointed out that this move will also allow more millennials to get a mortgage, saying “Student loans are the largest source of debt in the U.S. apart from mortgages. And so, this eased requirement could benefit millennials who are looking to buy their first homes.”

For those who are concerned about an increase in potential defaults, the Washington Post comfortingly tells us, “Using data spanning nearly a decade and a half, Fannie’s researchers analyzed borrowers with DTIs in the 45 percent to 50 percent range and found that a significant number of them actually have good credit and are not prone to default.” (I wonder which “almost 15 years” they looked at?)

If you’re reading this and thinking to yourself that expanding the amount of debt a person can carry and still be approved for more debt is short-sighted, and asking for trouble, you’re certainly not alone. Events like the collapse in 2008/2009 have a way of living long in the memory, and concerns about history repeating itself are completely valid.

This puts mortgage lenders into a tight spot. On the one hand, there is constant pressure to grow—and to grow, you need to issue more loans. To issue more loans, you need more customers, and of course you can’t get more customers if you keep rejecting them. On the other hand, mortgage defaults are costly, and potentially disastrous when they occur en masse.

The answer, to me, lies not in loosening standards, but in looking at metrics that have been previously ignored. This is the era of big data, of AI analytics, of alternative lending, and alternative credit scoring. These are technologies that have been making their way onto the Finovate stage for years, and they are increasingly being pointed at mortgages and real estate. We have access to incredible amounts of data about potential borrowers, we can direct machine-learning algorithms to sift through it, giving us a much more complete picture of a mortgage applicant than ever before. Do the “old” mortgage standards account for our new capabilities? Probably not.

So should the acceptable DTI ratio go up? Yes, at least in some cases. It’s absurd to think that the current system is operating at 100% efficiency, awarding mortgages to all of the people who are “creditworthy,” however you define that metric. But in order to raise it responsibly, it needs to be balanced by other data points and analytics that can point to a clear picture of creditworthiness, a picture that lies outside what the traditional model can account for.

Is Fannie Mae doing this the right way, with a model that will expand their potential customer base without exposing them—and our economy—to more risk? Or have the lessons of 2009 been forgotten (ignored?) by a new wave of executives who are simply looking to boost the bottom line, regardless of potential long-term consequences? Only time will tell, but I hope this is the start of a new credit-decisioning model that reflects our newfound technological capabilities.

Join us at FinovateFall 2017 in New York to see live demos from innovative fintech companies. Mortgage tech and real estate tech will be prominent themes at this year’s show, both during the demos that will take place on September 11 and 12, and the discussion that will take place on September 13 and 14. To register, go to finovatefall.com.

Last Chance for FinovateFall Presale Tickets!

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FinovateFall 2017 will be returning to the Hilton Midtown from September 11 through 14, and tomorrow is the last chance to register for a Presale Ticket to save $800. This is the lowest-priced ticket we’ll offer — make sure you register now to lock in the savings!

FinovateFall 2016 was our largest event yet, with more than 1600 attendees on hand to view live demos (no slides allowed!) of exciting fintech innovations. We’re expanding the show this year to offer even more great content.

In addition to the two days of demos, we’re adding another day and a half full of practical advice from your peers and industry gurus alike. These discussions will provide more context around the demos you’ll see on stage and help you incorporate the latest fintech innovations into your product road map. For more information on our expansion, take a look at the agenda or the informational brochure.

Presale Tickets are still on sale for $1,595 through the end of this week. Not only is this the lowest ticket price we offer, but tickets are fully refundable until July 28, so there’s no risk in locking down the price now. Register today!

FinovateEurope — Regular Tickets Are Almost Sold Out!

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There is one week to go before FinovateEurope 2017, and our regular tickets are nearly sold out! There will be last-minute tickets available, but if you’re planning on joining us, we’d recommend booking today to avoid the £600 price jump.

Based on current projections, we expect to run out of regular tickets by the close of business tomorrow, 1 February (exact timing will be determined by demand).

Don’t miss out, register now to guarantee your spot!


FinovateEurope 2017 is sponsored by: Comarch, FT Partners, KPMG, Lleida.net and R/GA.

FinovateEurope 2017 is partners with: Aite Group, Bankers Hub, Banking Technology, Celent, eBanking News, FemTech Global, Financial IT, Fintech Finance, The Fintech Times, Harrington Starr, Headcount, Holland Fintech, IBS Intelligence, IU eMagazine, Mapa Research, Ovum, Paybefore, The Paypers, Plus Journal, Smart Insights, SME Finance Forum, and Verdict Financial.

FinovateEurope Full Presenter Lineup Announced!

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FinovateEurope 2017 is just two weeks away, and the excitement is building! We’re gearing up for another great conference showcasing the best in fintech innovation from and for the European market.

You may have already seen a list of our presenters, but we’re excited to announce our full roster (including all previously “stealth” companies) for the first time. Here is the complete list of companies who will be demoing in London on February 7 and 8:

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For more information on what you can expect to see, take a look at our “sneak peek” blog post series. We’ll continue to add sneak peeks as the event approaches.

Join us in the heart of London to see the newest technology from each of these innovative companies for yourself. Space is limited, so register early to guarantee your spot!


FinovateEurope 2017 is sponsored by: Comarch, FT Partners, KPMG and Lleida.net.

FinovateEurope 2017 is partners with: Aite Group, Bankers Hub, Banking Technology, Celent, eBanking News, FemTech Global, Financial IT, Fintech Finance, The Fintech Times, Harrington Starr, Headcount, Holland Fintech, IBS Intelligence, IU eMagazine, Mapa Research, Ovum, Paybefore, The Paypers, Plus Journal, Smart Insights, SME Finance Forum, and Verdict Financial.

FinovateEurope 2017 — £100 Early-Bird Discount Extended!

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FinovateEurope 2017 is just over a month away, and time is running out for discounted Early-Bird tickets. Save £100 off the cost of your ticket when you register by the end of the week.

FinovateEurope 2016 was the biggest European Finovate ever, and this year’s showcase promises to be another one you won’t want to miss. With so much going on in European fintech, it’s never been more important to stay up to date on all of the latest trends and innovations that will define the future of finance.

Over the course of two days, you’ll get to see 72 leading fintech innovators doing live, seven-minute demos of the latest tech they have coming out of the shop. No slides, no videos, just wall-to-wall demos giving you an incredibly efficient way to see the state of the industry in just two days.

Early-bird tickets are still on sale through this Friday, 6 January, giving you a chance to save £100 off the cost of your registration. Make sure you register now while there’s still room (and before the price goes up!).

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FinovateEurope 2017 is sponsored by: Comarch, FT Partners, KPMG and more to be announced.

FinovateEurope 2017 is partners with: Aite Group, Bankers Hub, Banking Technology, Fintech Finance, Harrington Starr, Headcount, Mapa Research, Paybefore, and SME Finance Forum.

FinovateEurope Early Bird Discount Extended!

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2015 is officially behind us, and FinovateEurope 2016 is on pace to be our largest European event yet. A huge number of people registered in advance of the early bird ticket deadline back in December, but if you were out of the office and missed the deadline, no worries! We’ve extended the early-bird sales to this Friday, 8 January, to give everyone one more chance to save £100 on the cost of their ticket.

Finovate’s unique mix of live demos (no slides allowed!) and high-impact networking sessions offers an incredibly efficient way to stay up to speed on the fast-moving world of European fintech. This is your chance to connect with the influential innovators defining the future of finance and see the best of what the industry has to offer. Seating is limited, so lock in your spot (and the £100 discount) today!

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Check out the FinovateEurope homepage for more information, including a list of confirmed presenters. Also, our Sneak Peek blog series details what our presenters will show off on stage. For any other questions, email us at europe@finovate.com.

FinovateEurope 2016: Register by Friday and Save £100!

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We’re less than two months away from FinovateEurope 2016, and time is running out for discounted early-bird tickets. Save £100 off the cost of your ticket when you register before the end of the week!

European fintech is booming. It’s exciting to see all of the activity in the space, but with so much going on, it’s never been more important to stay up-to-date on the latest trends and innovations that will define the future of finance. FinovateEurope—9/10 February in London—is your chance to see 72 innovative companies demoing their latest technology. No slides, no videos, just wall-to-wall demos, giving you an incredibly efficient way to see the state of the industry in just two days.

Last year’s event sold out, with 1,250 senior executives, venture capitalists, press, analysts, and industry insiders on hand to take it all in. We’ve expanded seating for 2016, but we can already tell this year’s event is going to be even more popular.

Early-bird tickets are still on sale through this Friday, 18 December, giving you a chance to save £100 off the cost of your registration. Make sure you register now while there’s still room (and before the price goes up!).

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FinovateSpring 2016: Last Chance for Presale Tickets!

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As we approach the darkest, coldest day of the year, I find my thoughts turning to Silicon Valley in the springtime, and of course, FinovateSpring. We’ll be returning to San Jose’s City National Civic on 10/11 May 2016 for another intensive demo-only showcase of the best new innovations in financial and banking technology, and I, for one, can’t wait to see what fintech’s brightest innovators plan on rolling out of the shop.

Discounted presale tickets are on sale through the end of this week, and there’s no better time to register. Presale tickets are the lowest-priced tickets that we will offer, and they’re a whopping $400 off of the regular ticket price. And since tickets are completely refundable through 26 March 2016, there’s no risk in locking in the lowest price now.

FinovateSpring 2015 was our largest West Coast event so far, and we’re expecting 2016 to be even bigger and better. Give yourself an excuse to daydream about warm California sun and the excitement and energy that comes from having so many enterprising, innovative fintech professionals gathered in one place. Register today!

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If you want to apply to demo at FinovateSpring, there’s still time to submit your application. Email spring@finovate.com for more details, and watch a few live demo videos from last year’s presenters to get an idea of what to expect.