With over 8,000 delegates from 90+ countries, Money 20/20 certainly did a good job of shrugging off the challenges that have beset the financial services industry in the last few months. Although there was a perceptible undercurrent of concern stemming from the collapse of banks in the US and the overall deterioration of the funding environment, it seemed to me that not only was there a solid foundation of confidence among exhibitors and visitors, but a feeling that the entire sector was at a new inflection point.
UNDERLYING CONFIDENCE AND MATURITY
The zeitgeist of the conference was captured by day one’s keynote from HSBC UK CEO Ian Stuart. His comments about the fundamental strength of SVB UK, which HSBC acquired after the collapse of SVB in the US, served to support stability in the FinTech market. The decision to not only maintain SVB as stand-alone brand, but to invest and grow it into a global offering that can help businesses grow from Series A funding to IPO, spoke to real confidence in the sector.
There was a sense of maturity about the conference. Some of the froth, especially around things like crypto and blockchain, was absent this year. In its place was more of a focus on pragmatic solutions that can be implemented and scaled quickly to solve pressing issues. There was also a discernible shift from conflict to collaboration between established players and challengers. Many of the conversations were about partnerships and delivery rather than just competing visions. This theme was also reflected in Ian Stuart’s comments that the era of in-house development was over. Instead, he was scanning the market for innovations that can be quickly brought in as packaged solutions and scaled to reduce time to market.
WHAT WAS HOT
Perhaps unsurprisingly, sustainability and AI were top of mind for many of those I spoke to, as well as widespread interest in payments – specifically e-Wallets and banking-as-a-service applications that embed payments into wider service platforms. The centrality of data to all of these was well understood, yet I still found that for many it was ‘the plumbing’; out-of-sight and understood by just a few experts. To really accelerate from this new inflection point, banks still need to fully embrace the value of data and learn how to leverage it to mitigate risk and create opportunity.
This was a theme that excited many of those whom we spoke to. Clients and prospects were interested to hear from Teradata about how to create, share and deploy new and better intelligence from data. Our proven ability to scale data analytics to extract new insights in real time to meet incoming sustainability and green finance reporting demands was especially relevant. Conversations explored how to leverage vast and diverse data from across and beyond the bank as a way of not only meeting regulatory requirements, but to unlock new lines of business. To do so does not require everyone becoming ‘digital plumbers’, but recognition that these ‘systems of intelligence’ are the vital infrastructure for success.
Similarly, we had many discussions about the role of AI. The HSBC view communicated in Ian Stuart’s keynote was that it would help automate processes and make the bank more efficient. We agree and have already demonstrated with many clients the value of AI and machine-learning approaches in areas such as fraud detection. But our experience with AI goes deeper and broader than that. Predictive modelling, scenario-planning and simulations, all using live data can provide new insights into what customers really need and want, and how to best serve them. That includes AI-assisted next-best-offer marketing right through to entirely new product development.
TRANSACTIONS WITHOUT INTELLIGENCE
Which brings me to the emphasis on payments. Even as banks focus on the technical, procedural and regulatory challenges of moving money from one digital wallet to another, they are still missing opportunities to capture and analyse data in ways that add intelligence to those transactions. Too frequently data remains locked in departmental, functional or product-specific silos where it cannot add value. To really understand customers, or partners and business to business clients, and their needs as they use these new payment solutions, banks will need to combine transactions with a far wider set of data. And, to do it effectively and efficiently, they will need operate at speed and scale. In the area of payments alone, we see leading banks creating millions of models and generating hundreds of millions of queries per day. Yet, currently, few have invested in the ‘plumbing’ needed to support these volumes.
But, the ‘ah-ha’ moment in our Money 20/20 conversations came when bank representatives recognised that they did have the building blocks for these systems of intelligence. Teradata, already a partner providing robust, scalable and resilient data platforms, and fully cloud-centric, is perfectly placed to create the rich data fabrics needed to support these next generation applications. No data silos, no unscalable departmental solutions, or product specific proof of concept.
Through hundreds of one-to-one conversations at Money 20/20, my impression is that the financial services sector is primed for a new wave of innovation, development and growth. Those that can appreciate not only the vital nature of the data plumbing that connects across their businesses, but how to tap into that to release new value, will be the first to capitalise on these opportunities. I am confident that there are many in the industry already working to do just that, and I’m excited to speak to many more interested in learning how.