This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.
Finovate Blog
Tracking fintech, banking & financial services innovations since 1994
You’ve likely heard by now that Apple has taken the veil off of its BNPL tool, Apple Pay Later. The tech giant announced Apple Pay Later at its World Wide Developer Conference on Monday.
If you haven’t read coverage of the announcement yet, here’s the gist– the new tool will enable Apple Pay users to split any purchase made where Apple Pay is accepted into four installments, paid out over the course of six weeks (check out the video announcement at the bottom of this post for more details).
Apple is coming in late to an already over-saturated BNPL market and faces a lot of competition from well-established players. However, the company is not showing up to compete empty handed. Apple Pay Later has a handful of advantages over other contenders.
Advantages
Acceptance at physical retailers As mentioned earlier, users can pay with Apple Pay Later anywhere Apple Pay is accepted. This includes many physical retailers. And because 90% of retail purchases are made in-store as opposed to online, Apple already covers a lot of territory that other players haven’t been able to access yet. BNPL giant Klarna currently offers in-store services at just over 60,000 retail locations. As a comparison, Apple Pay is accepted at more than 250,000 retail locations.
Underwriting The success of a BNPL tool not only hinges on retailer acceptance, but also on underwriting. After all, if your users aren’t paying you back, what’s the point?
While Apple is working with Goldman Sachs as the issuer for the Apple Card, the bank will only be involved in offering access to the Mastercard network and won’t facilitate underwriting. However, Apple’s advantage comes in the form of Credit Kudos, a U.K. startup the tech giant bought last year that enables businesses to leverage open banking to assess affordability and risk.
Physical and virtual card Some BNPL players already offer both physical and virtual payment cards. However, Apple having both will be a leg up for the company. Having both a physical and virtual presence takes up space consumers’ digital and physical wallets, making it more likely to be top-of-mind (and top-of-wallet).
Brand trust and recognition According to Statista, Apple has the second most valuable brand in the world at $612 billion. This value is driven by having a brand that consumers trust, recognize, and value. It is widely believed that when Apple releases a hardware product, it will be top-notch. Consumers will expect the same from Apple Pay Later, and will therefore be less hesitant to trust the new tool.
What’s missing?
Apple has thought of almost everything when it comes to Apple Pay Later. One thing I’d love to see is a retroactive payment-switching feature similar to Curve’s Go Back in Time. The tool allows users to free up cash by switching payments from one card to another up to 30 days after the purchase was made.
Apple could allow customers to choose to use Apple Pay Later even after a transaction has been completed in order to free up emergency cash flow. While I wouldn’t advise this as a personal finance strategy, it would offer Apple an even greater leg up on BNPL competitors (including Curve’s when it becomes more widely available in the U.S.).
June is National Pride Month, a time to honor and celebrate the Lesbian, Gay, Bisexual, Transgender, and Queer (LGBTQ) community. Many of the contributions to fintech and financial services from members of the LGBTQ community go unnoticed. But what can no longer be overlooked is the growing number of resources in the financial services industry that are designed to serve the unique needs of LGBTQ financial services consumers. To this end, we’re taking a look at three companies that are dedicated to making banking and financial wellness easier for those in the LGBTQ community.
Daylight
Calling itself “banking for you and your chosen familly,” Daylight may be the pre-eminent, dedicated banking solution provider for the LGBTQ community. Founded in 2020, by “queer millennials” Rob Curtis (CEO), Billie Simmons (COO), and Paul Barnes-Hoggett (CTO), Daylight enables individuals and families to access a range of key banking services without worrying about supporting companies or initiatives that are detrimental to the LGBTQ community.
What services does Daylight provide? Like other banking solutions providers, Daylight offers a deposit account – backed by MetaBank – an Apple and Google Pay-compatible debit card, and financial wellness solutions via mobile app. The app has a round-up feature to help incentivize and ease savings, as well as goal-setting tools to help users plan for both expected and unexpected financial commitments. Daylight can be used by any U.S. citizen, 18 years or older.
“Our community has $1 trillion (in) spending power in the U.S. and yet 53% of LGBT+ people struggle to maintain regular savings,” Daylight Operations Associate Peyton Swift wrote recently on the Daylight blog. “That’s high-key unacceptable. We’re done letting the system ignore us. We’re building Daylight around our unique needs: different timelines, different kinds of families, different goals, and different futures.”
Superbia
New York-based Superbia Services was founded in 2017 as a “profit for purpose” entity focused on developing community-based financial products. In 2020, the organization launched the Superbia Credit Union, the first LGBTQ-focused profit-for-purpose financial institution with a nationally-oriented membership. Located in Michigan, Superbia CU is the first new credit union to receive a state charter in more than 33 years.
“When operational, Superbia Credit Union will benefit members through tailored products and services, more favorable rates, and grants made regularly to organizations that help support and advance causes of the LGBTQ community,” a statement credited to Superbia CU read. Myles Meyers, founder and CEO of Superbia Services noted that, for all the gains made by the LGBTQ community in recent decades, there are still major issues of discrimination.
“In the same way a bakery can refuse a cake, one bank’s discrimination could lead to higher interest rates on homes, rejection of student loans, judgement on credit for health needs, outdated products and services for LGBTQ individuals and families, and lack of acceptance and understanding among traditional institutions,” Meyers said.
In addition to serving the national LGBTQ community with banking services – including credit cards – Superbia will offer its members both life and healthcare insurance that takes into account the unique needs of LGBTQ Americans. This includes providing coverage regardless of relationship status, gender identity, or preventative medications. Superbia has pledged to donate 10% of all revenue earned each year from its financial products and services to the Superbia Foundation.
Pandemic-related complications have slowed the regulatory approval process for many nascent financial institutions – including Superbia. According to Investopedia, the credit union had hoped to open its doors in the summer of 2021. The company hopes to begin operations soon.
Queer Money
Queer Money is not a fintech. But when it comes to financial wellness resources for the LGBTQ community, the Queer Money podcast is an option that deserves more attention. Created by David Auten and John Schneider, who launched their website, The Debt Free Guys, in 2013, Queer Money bills itself as the #1 gay podcast focused on the financial needs of the LGBTQ community.
Recent episodes of Queer Money have looked into the challenges of being an angel investor, answers to questions about “lesbian money,” savings strategies for low-wage workers, and social security issues for same-sex couples.
Sharing their story on their webpage, Auten and Schneider note that at one point the married couple found themselves embodying “the gay cliché of living fabulous but being fabulously broke.” From this point, the two financial professionals decided to “walk the talk”, overhauling their finances and using their personal and professional experiences to help “queer people (and allies) live fabulously not fabulously broke” via a combination of credit card debt reduction, entrepreneurship, and better savings and investing.
Auten’s background includes years as a Business Systems Analyst as well as an institutional broker/project manager. A graduate of the University of Colorado, Denver, Auten is also the co-author (with John Schneider) of 4: The Four Principles of a Debt-Free Life and is a nationally recognized expert on queer and straight personal finance. Schneider has experience as a financial services compliance analyst, and spent more than a decade with Charles Schwab in a variety of capacities including Senior Manager for Advisor Services Strategic Integration.
We’ve seen some bad news in the tech sector lately. YCombinator is asking its portfolio founders to “plan for the worst” and prepare for a downturn and Klarna is laying off 10% of its employees. Headlines such as, “Tech’s High-Flying Startup Scene Gets a Crushing Reality Check” aren’t helping consumer or investor sentiment, either. It can be tough to remain optimistic.
The good news is that the fintech industry is resilient. So amid the recent onslaught of disheartening news, here are four reasons you can be optimistic about fintech right now.
DeFi is promising
Fintech’s future is bright, and one shining light is decentralized finance (DeFi). It’s hard to know the exact implications DeFi will have on banks, fintechs, and other traditional financial (TradFi) organizations.
However, it’s clear that decentralizing traditional operations such as money transfers and loans will make a more efficient financial system. What’s more, DeFi is poised to help the 1.7 billion unbanked individuals across the globe benefit from financial services they’ve previously never had access to.
The best innovations are born when times get tough
It’s true that necessity is the mother of invention. Whether it’s an economic downturn, a pandemic, or a crisis in a different form, difficult times have proven to motivate people to develop creative solutions. This can be seen in countless examples from the COVID Recession of 2020. After the COVID pandemic hit, businesses were forced to figure out a way to convert their offering or service into the digital channel. In fact, many fintech companies grew while firms in other sectors were forced to make major cuts.
With new crises come new issues, and new problems that businesses and consumers need help solving. A bear market or an economic downturn would be no different; the best innovations are yet to come.
Still room for improvement
Because the fintech industry is relatively nascent, many of the problems the industry set out to solve still exist. In a piece we published earlier this month titled, “Has Fintech Failed?” we took a look at all of the ways fintech is failing to help consumers and businesses. As a few examples, underbanked populations are still lacking quality financial solutions, there are no open banking mandates in the U.S., fraud is rampant, and digital identity is flawed. The good news is that this leaves a lot of room for improvement, and therefore a lot of room for new competitors.
Fintech is here for a reason
When all is said and done, fintech is made to help individuals and businesses better manage their finances and more easily access financial services. Because money is not an optional tool for survival in the modern economy, financial services companies have a unique ability to help others through a recession or slowdown in their own industry. This pervasiveness makes for endless opportunities for banks, fintechs, and DeFi alike.
The fintech industry is not just here to serve financial services organizations, but rather to help people in this world that need financial services the most. That’s why we’re here, and it’s certainly something to be optimistic about.
FinovateSpring 2022 goes live next week. From Wednesday, May 18 through Friday, May 20, FinovateSpring returns to San Francisco, California for three days of innovative fintech demonstrations, insightful mainstage presentations, and lively debates and panel discussions on the most critical topics in fintech today.
To help get you ready for next week’s event, here’s an opportunity to get to know some of the companies that will be making their first-ever appearance at a Finovate conference. From innovators in credit decisioning and data management to specialists in cybersecurity and financial wellness, this year’s cohort of FinovateSpring newbees promises something for everyone.
Click on the buttons below to learn more about each of the companies making its Finovate debut next week at FinovateSpring. Then visit our FinovateSpring 2022 hub to pick up your ticket today!
Be sure to catch our Finovate first-timers next week at FinovateSpring 2022 in San Francisco, California, May 18 through May 20. Tickets are still available, so visit our registration page today and save your spot.
Today, as we near the end of our Financial Literacy Month commemoration, we’re highlighting those Best of Show winning fintech innovators and the work they do in making financial education available to a broadening range of communities.
Provo, Utah-based Banzai made its one-and-only Finovate appearance at FinovateFall 2018 in New York. At the event, the company won Best of Show for its offering that helps banks and credit unions boost customer engagement and ROI while providing financial education for their customers and members.
FamZoo demoed its technology on the Finovate stage twice – in 2011 and again in 2013 – winning Best of Show on both occasions. Headquartered in Palo Alto, California and founded in 2006, the two-time Best of Show winner offers a prepaid card and financial education for kids in a single family finance app.
When it comes to financial literacy, companies like Horizn help the financial services community help itself. Making its Finovate debut in 2017, Horizn earned a pair of Best of Show awards in its two most recent appearances in 2020 and 2021. The company offers a platform that helps financial institutions accelerate digital banking knowledge, fluency, and adoption for both customers and employees. Headquartered in Toronto, Ontario, Canada, Horizn was founded in 2011.
Not many companies can boast of winning a Finovate Best of Show award in two different decades, but Kasasa (formerly known as BancVue) has done that and then some. The financial and marketing technology provider, based in Austin, Texas, and founded in 2004, won Best of Show in its Finovate debut in 2009. Nearly ten years later, the company picked up its third Best of Show award at FinovateSpring in 2018 (Kasasa also won Best of Show in 2011 in San Francisco). In addition to offering a variety of innovative fintech products – such as its “take-back loan” – Kasasa also launched an online game called MoneyIsland that helps instruct kids on the importance of sound money management.
One of two Best of Show winning Canadian companies with a commitment to financial literacy, Ottawa, Ontario-based Launchfire won Best of Show at FinovateSpring 2019 in its second Finovate appearance. The company specializes in game-based employee and customer engagement for financial institutions. Most notably, Launchfire offers an employee engagement solution, Lemonade, that blends gamification with micro-learning, AI, and “surgical analytics” to educate financial services employees.
Long Game is one of Finovate’s newest alums and one of our more recent Best of Show winners, as well. The company, founded in 2015 and based in San Francisco, California, won Best of Show in its Finovate debut at FinovateFall 2021 last September. Long Game offers a bank-branded mobile app that combines the best practices of prize-linked savings and mobile gaming to help banks and credit unions acquire new customers, increase customer engagement, and boost financial literacy.
Earning a Best of Show award in its Finovate debut at FinovateFall 2019, Zogo Finance leverages behavioral economic research developed at Duke University to help improve financial literacy for young people. The company’s app transforms tricky financial concepts into smaller, easier-to-understand lessons, and offers rewards and incentives to users who complete them. The company announced 31 new financial institution partnerships in Q1 of 2022 alone, bringing its total partnership tally to more than 180 banks and credit unions.
April is financial literacy month. To commemorate the occasion, we’re showcasing a handful (or two!) of Finovate alums that are leveraging technology to lead the fight for financial literacy.
Many of these companies specialize in helping kids and youth learn about savings, investment, credit, and other aspects of personal finance and money management. Others respond to the needs of financial services professionals, ensuring that they are informed and up-to-date on many of the resources and tools available to them to help serve the public. Together, they are a reminder that financial education is in many ways a lifelong pursuit, one that is both necessary and rewarding for younger and older financial services consumers alike.
Fun fact: Companies involved in financial literacy tend to be Finovate fan favorites. Of the 13 alums listed below, more than half won Best of Show awards for their Finovate demos!
Have you ever played a game called Fintech Hot or Not? There are no right or wrong answers, you just yell out, “hot” or “not” in response to a fintech trend. The game works best when played with a captive, diverse audience, so I used the participants in my recent FinovateEurope Future of Fintech panel to gather their thoughts on a range of fintech trends.
Included in the panel were Radboud Vlaar, Founder and managing Partner at Finch Capital; Oliwia Berdak, VP & Research Director of Financial Services at Forrester; and Sam Kilmer, Managing Director of Fintech Advisory at Cornerstone Advisors. Ronit Ghose, Global Head of Banking, Fintech, and Digital Assets at Citi Global Insights was also in the panel discussion, but was not able to participate in the game for legal reasons.
In this version of the game, I asked the panel members if a trend was hot (or not) and I also asked if they would invest (or not) in a startup specializing in that trend. That’s because not only are some of the hottest trends not worth backing, but also some of the least popular themes in fintech may turn out to be the most profitable.
Below is the summary of the panel’s thoughts on what’s hot, what’s not, and what’s worth investing in.
Hot or not
Hot
Web3
DeFi
Stablecoins
Quantum computing
Edge computing
Wholesale Central Bank Digital Currencies (CBDCs)
Buy now, pay later (BNPL)
NFTs
Digital Identity
Not Hot
Special purpose acquisition companies (SPACs)
Retail Central Bank Digital Currencies (CBDCs)
Mixed
Metaverse
Super apps
Voice banking
QR code payments
I expected more mixed reactions on BNPL, simply because there are so many companies leveraging this technology, and many are facing scrutiny for evading laws and encouraging consumers to take on too much debt.
Additionally, I was surprised at the very clear split between retail and wholesale CBDCs. Retail CBDCs, those designed to be available to the general public, were very clearly “not hot.” Instead, panelists were in favor of wholesale CBDCs, which are designed to be used among financial intermediaries.
As for trends in the “mixed” category, I would have expected both the metaverse and super apps to be labeled as “hot.”
Invest or not
Invest
Edge computing
BNPL
Digital identity
Not Invest
Metaverse
Super apps
Mixed
Web3
DeFi
Stablecoins
Quantum computing
SPACs
Voice banking
QR Code payments
NFTs
To be clear, the panelists were not putting down any money, but they were still cautious when deciding whether or not a trend was worth investing in. Each panelist was decisively not interested in the metaverse, web3, or super apps. They did, however, choose edge computing over quantum computing. And to my surprise, they were mixed on whether or not DeFi was worth the investment.
If you attended FinovateEurope, you can watch the full panel discussion in the on demand content section of the FinovateEurope ConnectMe platform for a limited time.
As part of Finovate’s continued celebration of Women’s History Month and female-led fintech, we are taking a moment to showcase the women whose companies demoed their latest innovations at our Finovate conferences last year.
Hanna Wu
CEO and Co-Founder, Amplify Life Insurance, FinovateFall. Headquartered in San Francisco, California, and founded in 2019, Amplify helps people build wealth through permanent life insurance.
Katherine Regnier
CEO and Founder, Coconut Software, FinovateSpring. Headquartered in Saskatoon, Saskatchewan, Canada, and founded in 2007, Coconut Software provides a platform for financial institutions to help them improve customer digital and in-person engagement.
Janice Diner
CEO and Founder, Horizn, FinovateFall (Best of Show winner). Headquartered in Toronto, Ontario, Canada, and founded in 2011, Horizn helps banks accelerate digital banking knowledge, fluency, and adoption for both customers and employees.
Laurie Rowley
CEO, Icon Savings Plan, FinovateFall. Headquartered in San Francisco, California, and founded in 2019, Icon Savings Plan provides portable retirement savings plans, the next generation in workplace savings.
Ana Inés Echavarren
CEO, Infocorp, FinovateFall (Best of Show winner). Headquartered in Montevideo, Uruguay, and founded in 1994, Infocorp offers a smart digital platform that provides banks with fast and flexible solutions to deliver superior customer experiences.
Lindsay Holden
CEO, Long Game, FinovateFall (Best of Show winner). Headquartered in San Francisco, California, and founded in 2015, Long Game is a gamified finance app that helps banks acquire new customers and increase engagement with their current Millennial and Generation Z customers.
Ksenia Yudina
CEO, UNest, FinovateFall. Headquartered in Hollywood, California, and founded in 2020, UNest is the leading provider of financial planning, savings, and investment tools for parents to help their children reach their dreams.
Yamini Bhat
CEO and Co-Founder, Vymo, FinovateSpring, FinovateFall. Headquartered in San Francisco, California, and founded in 2013, Vymo offers a sales acceleration platform for financial services firms like Berkshire Hathaway, AXA, and BNP Paribas.
You’ve no doubt heard of the three largest buy now, pay later (BNPL) players, Klarna, Afterpay, and Affirm. The oldest of these, Klarna, has been around since 2005. But after the BNPL boom exploded in 2020, dozens of new players (and even some consolidation) emerged in the BNPL arena.
With so much competition– especially competition from large incumbents such as Chase–it can be difficult for BNPL companies to stand out and attract frequent customer spend. That is why some firms have found it advantageous to tailor their offering to a more specific audience. By targeting niche consumer groups, companies can provide a better user experience by tailoring each aspect of their offering to the specific group.
We’ve identified four niche players, each of which uses specificity to its advantage.
Study now, pay later
Australia-based ZeeFi recently launched its platform that helps education providers maintain cashflow and offers students a flexible, interest-free payment solution. The education provider receives payment upfront, while students can spread out the cost of their course for up to 36 months. ZeeFi was founded in 2016 under the name Study Loans. The company has raised $88.5 million.
Travel now, pay later
Uplift was founded in 2014 to allow users to pay for their travel experiences over time. The San Francisco-based company partners with travel brands, including hotel, airline, cruise, travel agencies, and more, and offers a point-of-sale financing option that lets customers spread their purchase out over time. Depending on factors such as purchase details and the traveler’s credit history, Uplift offers no-interest and simple interest loans that users can pay back over time, even after their trip.
Healthcare now, pay later
medZero‘s tool allows businesses to offer their employees a way to spread out the cost of their out-of-pocket healthcare expenses. The company provides users on-demand access to funds to pay up-front for the fraction of their healthcare bill that their insurance doesn’t cover, and pay the balance back over time. medZero doesn’t run credit checks, is fee-free, and charges no interest. The Missouri-based company has raised $5.7 million since it was founded in 2015.
Housing now, pay later
New York-based Flex helps renters pay their landlord on a schedule that works with their cashflow. Flex automatically connects to major rent payment companies and sends rent money on the user’s behalf to their landlord on the first of the month. As an added bonus, the company can help users build their credit scores, too. Flex, not to be confused with challenger bank Chime’s in-house BNPL tool with the same name, was founded in 2019 and has raised $5.8 million.
FinovateEurope 2022 is less than a month away, and innovative fintechs from all around the world are gearing up to demonstrate their latest technologies live on the Finovate stage. Find out more about our annual European fintech conference, including how to register and save your spot as Finovate returns to live events in Europe for the first time since 2020 next month on March 22 and 23.
One of the goals of every company demoing their solutions at Finovate is to win a coveted Best of Show award. This honor is granted exclusively by our Finovate attendees who evaluate every company on stage and select only those innovators whose technology is most impressive and, potentially, impactful. To give you a sense of the kind of companies to win this award, here’s a look at the FinovateEurope Best of Show winners from the previous two years – as well as an update on what they’ve accomplished since winning their award.
2021
Dbilia earned a Best of Show in its Finovate debut at FinovateEurope 2021 for its platform that enables creatives and influencers to sell digital memorabilia. The New York-based company was featured in the July edition of MarTech in a look at the rising NFT trend.
Property investment platform Proptee, also a Best of Show winner in its Finovate debut last year at FinovateEurope, raised more than $57,000 in seed funding in December from Lebenheim Capital and Steep VC.
Continuous product design innovator Quantum Metric was among the Finovate newcomers to earn a Best of Show award at FinovateEurope 2021 last March. Since then, the Colorado Springs, Colorado-based company has announced the availability of its solution on Salesforce AppExchange, and forged partnerships with Korea Air, iGaming operator BetVictor, luxury fashion brand La Perla, experience management software company Qualtrics, and video-based human insight innovator UserTesting.
2020
If 2021 was the year Finovate audiences showed their appreciation for conference newcomers, 2020 marked the year when veteran Finovate alums earned their place in the spotlight. Four of the companies that won Best of Show at FinovateEurope in that pre-pandemic year – Dorsum, Glia, iProov, and W.UP – picked up their second awards in a row (or more) having taken home Best of Show honors at the previous year’s conference in 2019.
Digital customer service innovator Glia has been one of Finovate’s most popular demoing companies in recent years, with multiple Best of Show wins in Europe and in the U.S. Earlier this month, the company announced a partnership with insurtech leader Sureify, integrating its capabilities into Sureify’s Lifetime platform. In 2021, Glia reeled in $78 million in funding, and earned recognition from Deloitte with a spot on the firm’s Technology Fast 500 for the second consecutive year. Among the company’s new partnerships forged in 2021 were collaborations with Kasisto, Posh, Apiture, Liberty Bank, fellow Finovate alum Clinc, and Zensar.
Horizn, which specializes in helping financial institutions and their employees maximize and accelerate their digital transformation efforts, earned the first of its Best of Show awards at FinovateEurope in Berlin in 2020. The company announced a partnership with Pacific Western Bank at the beginning of this month, powering the Los Angeles, California-based financial institution’s newly launched digital learning platform.
Biometric authentication company and FinovateEurope veteran iProov earned its third Best of Show award at our European fintech conference in 2020. The company secured $70 million in funding from Sumeru Equity Partners to start this year and, earlier this month, was granted a patent to extend its Genuine Presence technology to include driver’s license and government ID verification. Named to the Deloitte Fast 50 of the fastest growing technology firms in the U.K. last year, iProov reported a record 2021 in which the company achieved revenues that were 3x the previous year’s results.
Sonect demonstrated its global platform for cash transactions during its Finovate debut in Berlin in 2020, winning a Best of Show award. The company, headquartered in Zurich, Switzerland, enables users of its technology to withdraw cash via smartphone at any one of its 2,500 partnering retailers. Last summer, the company announced that its service would be available to customers in the U.K., following its participation in the U.K. Finance Community Access to Cash Pilots Initiative. In October, Sonect announced that it had raised more than $5 million (EUR 4.65 million) in funding from Italian Angels for Growth to bring its cash access solution to Italy.
Budapest, Hungary-based digital banking solution provider W.UP is another FinovateEurope favorite, having been awarded Best of Show in each of the last three FinovateEurope events. The company offers a personalization platform which leverages data to help institutions offer better banking services. In October of 2021, the company merged with BSC of Czechia to form a new company Finshape that is dedicated to driving digital transformation in banking in Europe.
When your day job keeps you busy for 40+ hours per week, it’s hard to take on new tasks or pay attention to new initiatives. But one thing 2020 taught us is that the digital initiative doesn’t take vacation days. So when enabling technologies and platforms like the metaverse come around, banks and fintechs need to pay attention.
First, let’s look at what the metaverse is and what it is not. You can think of the metaverse as immersive, collaborative internet. In some respects, the metaverse is already here. Users are already collaborating with each other on multiple platforms, and alternate realities– whether in 2D or 3D– have been around for decades. However, though the metaverse will be accessible via virtual reality, it is not the same as virtual reality.
The metaverse is at an early stage and is still not well defined. Despite this, banks and fintechs still need to be paying attention. Here’s why.
It’s not the first time fintech has tried to embrace a different reality
In 2014, many fintechs and even some established financial services companies launched mixed reality experiences in the form of Google Glass, which was released to the public in May of 2014. Top Image Systems (now Kofax), Fiserv, eBankIT, and Wallaby Financial (now Bankrate) all released tools for Google Glass in 2014.
Most are familiar with the fate of Google’s mixed reality glasses– they were discontinued in 2015. The failure of Google Glass is not the point, however. What matters is the speed at which this group developed around the new technology. We can expect the same for the metaverse.
You’re already behind
It’s easy to sleep on trends that seem like they are nothing but hype. Despite that, if you’ve been sleeping on this trend, you’re already behind. JP Morgan announced yesterday that it has joined the metaverse by opening a virtual lounge. Located in Decentraland, JP Morgan’s Onyx Lounge shows a timeline of the bank’s blockchain innovations, has three videos to watch, and has a tiger walking around.
The bank also released a white paper on opportunities in the metaverse. “There is a lot of client interest to learn more about the metaverse,” JPMorgan’s Head of Crypto and the Metaverse Christine Moy told Coindesk. “We put together our white paper to help clients cut through the noise and highlight what the current reality is, and what needs to be built next in technology, commercial infrastructure, privacy/identity and workforce, in order to maximize the full potential of our lives in the metaverse.”
In five years, you’ll wish you had paid attention
If there’s nothing to the metaverse right now, why bother paying attention? Because five years from now you’ll wish you had been paying attention.
While it’s easy to say that about any risk-laden investment such as real estate or tech stocks, you can consider the example of cryptocurrency. What if your organization had been investing in crypto research five years ago? You may have already been leveraging the benefits of stablecoins or smart contracts. The metaverse is just one more way to invest in the future of your organization.
Metaconomy
One very attractive aspect of the metaverse is that it is intertwined with the blockchain. In the metaverse, digital assets will be exchanged for digital currencies in a new economy. There is even speculation that work will take place in the metaverse. According to JP Morgan, $54 billion is spent on virtual goods each year and NFTs have a current market capitalization of $41 billion. Banks won’t want to be left out of this new metaconomy.
It’s where you’ll find your next clients
Generation Z* and Generation Alpha** are not only digital natives, many of them are mixed reality natives. They’ve grown up with virtual reality headsets and spend hours a day in parallel universes such as Fortnite. To capture the attention of this group, there is no doubt that financial services companies will need to meet these young clients where they are.
If JP Morgan’s bet on Decentraland is any indication, banks and fintechs should start planning their first move in the metaverse. However, as Cornerstone Advisors’ Alex Johnson recently pointed out, they may want to hold off on building their first bank branch in the metaverse.
As part of Finovate’s continued commemoration of Black History Month, we’re showcasing some of the African American fintech and financial services influencers and leaders who are driving innovation and inclusion in our industry.
If you’ve ever lamented the lack of African Americans in the typical fintech influencer lists issued year after year, then hopefully this sampler of African American fintech entrepreneurs, technologists, and founders will help bring a little more color to the face of fintech.
Harry Alford III
Alford (LinkedIn) is Head of Institutional Sales at Coinbase Cloud where he is focused on sales and business development via partnerships and collaborations with financial institutions, businesses, and fintech startups. He is also co-founder of Humble Ventures, a Washington, D.C.-based venture development firm that supports and invests in founders and organizations that build solutions for diverse communities.
Jacqueline M. Baker
Baker (LinkedIn) is Vice President of Startup Programming at the AARP Innovation Labs where she leads a team dedicated to identifying promising startups via pitch competitions and accelerators. An expert in modern etiquette, leadership, and disruptive innovation, Baker is also founder and principal consultant at Scarlet Communications, an Upper Marlboro, Maryland-based firm that offers modern leadership guidance, professional training and coaching.
Marla Blow
Blow (LinkedIn) is President and Chief Operating Officer of the Skoll Foundation, an organization that invests in, networks, and champions social entrepreneurs and social innovators. In her role at Skoll, Blow leads the firm’s program, grants, investments, and financial management, including its operations, endowments and portfolio partnerships. She is also a member of the board of directors for Square Financial Services.
Asya Bradley
Bradley (LinkedIn) is co-founder and Chief Operating Officer at First Boulevard, a neobank and fully inclusive financial services company dedicated to helping Black Americans build generational wealth. Also the founder of #HowSheWorks, an inclusive grassroots community of founders and allies from underrepresented communities, Bradley has previously worked as SVP of Revenue at banking-as-a-service innovator SilaMoney, and as VP of Partnerships at identity verification specialist – and Finovate alum – Socure.
Chris Brummer
Brummer (LinkedIn) is a professor and faculty director at the Institute of International Economic Law at Georgetown University Law Center. He has lectured frequently on topics ranging from financial inclusion and equity to financial regulation and global governance. A member of the board of directors of Fannie Mae and the co-founder of the Fintech Beat Podcast, Brummer is author of a number of books including Fintech Law in a Nutshell and Cryptoassets: Legal, Regulatory, and Monetary Perspectives.
Thasunda Brown Duckett
Duckett (LinkedIn) is President and CEO of TIAA, a Fortune 100 financial services company that provides investing, retirement, and banking advice to academic, medical, non-profit and public sector professionals. Duckett has an extensive background in financial services, including executive tenures at JP Morgan Chase and Fannie Mae. She is a member of the board of directors at a number of organizations including NIKE, and the Economic Club of New York, as well as being part of the Dean’s Advisory Board for the Baylor University Hankamer School of Business.
Roger W. Ferguson, Jr.
Ferguson J. (LinkedIn) is the former President and CEO of retirement services company TIAA. He was previously Head of Financial Services at Swiss Re and a member of the company’s Executive Committee. He also served as Vice Chairman of the Board of Governors with the Federal Reserve from 1999 to 2006. A Harvard University graduate, earning a B.A. in Economics, a J.D., and a PhD in Economics from the institution, Ferguson Jr. also spent 13 years as an associate and partner with McKinsey & Company.
Jon Fortt
Fortt (LinkedIn) is Co-Anchor of CNBC’s TechCheck (previously Squawk Alley) where he specializes in the intersection of technology, finance, and innovation. Formerly a senior writer with Fortune, Fortt is an author, designer, and publisher of an educational course called The Black Experience in America that draws on diverse sources ranging from Shakespeare to Toni Morrison.
Donald Hawkins
Hawkins (LinkedIn) is co-founder and CEO of First Boulevard, the “unapologetically Black, digitally native bank” designed to help African Americans build generational wealth. An ICBA Bankers’ Choice 2020 recipient, Hawkins is a serial entrepreneur who, before launching First Boulevard, founded Griffin Technologies, a Kansas City, Missouri-based firm that helps community banks and credit unions improve customer engagement, boost sales, and compete with larger financial institutions.
Netta Jenkins
Jenkins (LinkedIn) is Vice President of Global Inclusion at Unqork, a no-code application platform that helps businesses build complex, customized software solutions faster while keeping costs low. Recognized by Forbes as one of the top seven anti-racism educators in the world, Jenkins is also co-founder of Dipper, a digital safe-space and community for professionals of color to share their experiences in the workplace.
Rodney Williams
Williams (LinkedIn) is co-founder and Chairman of SoLo Funds, a fintech that serves underrepresented communities in the U.S. by providing an alternative lending option that emphasizes equity and empowerment. Williams also co-founded ultrasonic data platform LISNR, a technology company that provides secure person-present authentication. A Henry Crown Fellow at The Aspen Institute and a Techstars Mentor, Williams received his MBA in Finance and Supply Chain Management from Howard University in Washington, D.C. Find out more about Williams and SoLo Funds in our interview from earlier this month.
Teri Williams
Williams (LinkedIn) is President and Chief Operating Officer at OneUnited Bank, the largest Black-owned bank in the U.S. She is responsible for both implementing the bank’s strategic initiatives as well as managing the day-to-day operations of the institution. She has led OneUnited Bank in its consolidation of four local banks into a cohesive, national brand that provides affordable financial services for all while supporting economic development and wealth building in urban communities. An executive with OneUnited Bank for more than 26 years, Williams was previously a Vice President at American Express.
Dana L. Wilson
Wilson (LinkedIn) is a professional speaker and consultant who helps financial services firms create inclusive workspaces. She is also founder and CEO of CHIP (Changing How Individuals Prosper), a B2B2C marketplace for companies seeking Black and Latino financial professionals. A Diversity, Equity & Inclusion Award Winner and self-described “FinServ Techie”, Wilson is also the host of The Included Series Podcast, a program that features people of color sharing their personal financial journeys.
