EXCLUSIVE: ‘Racing Towards the New Normal’ – James Tall in ‘The Paytech Magazine’

After a pandemic-enforced move to online last year, Money20/20’s long run of successful crowd-pulling shows made a triumphal return to Amsterdam in September, to facilitate fintech industry’s connections, conversations, innovations and deals. The Fintech Finance team was glad to be back and on the ground – running, as usual! Here, James Tall records some of our observations and favourite moments from what was the comeback of the year!

Last month’s Money20/20 Europe event in Amsterdam was the first large-scale industry conference to be held in-person following the COVID-19 pandemic. There was a palpable buzz around the lively Dutch capital as more than 4,000 attendees and 1,500 companies from 76 countries arrived in the city to reconnect. And people were keen to make up for lost time, with more than 7,000 1-2-1 meetings booked in. As Money20/20’s president, Tracey Davies, exclaimed: “We love digital, but you cannot beat real life!”

A Refreshed Format

Following a forced but fruitful transition to the virtual, interactive MoneyFest platform last year, Money20/20’s strategy and growth officer Scarlett Sieber lauded the ‘brilliant minds of the European content team’ for taking a radical new approach for 2021. The conference set-up moved away from keynotes and towards a much more inclusive forum, with attendees encouraged to join in – and even lead – sessions.

It was an impressive sight, with stages primed for open conversation and a more interactive feel. The floor plan was designed with sweeping walkways and large spaces to make sure things were COVID-secure, yet collaborative.

“Normally, what’s disruptive about Money20/20 is the fact we’re talking about electronification, about digital,” said Sanjib Kalita, editor-in-chief, Money20/20. The most disruptive thing this year was that we were live and in-person; just the fact we were in a room felt crazy! But it’s good to hear the crowd react to things, which guides you in more ways than you would expect.”

The new set-up still managed to deliver its usual stellar line-up of brands and industry leaders, covering the hottest topics reshaping financial services. Speakers talked attendees through a host of visual sessions that explored the fundamental market shifts and trends that are now characterising financial services, whether COVID-induced, existing or new.

Digital assets march on

At times, it felt like cryptocurrencies and central bank digital currencies (CBDCs) dominated the dialogue. But then, whether it’s Bitcoin’s record price highs or the adoption of it as legal tender in El Salvador, these digital assets have been making headlines. Coinbase’s Marcus Hughes was quick to emphasise crypto’s role in driving financial inclusion, pointing out there’s a place for many different types of products and services in the ecosystem.

“Crypto can empower access to financial services for people who would otherwise never have the possibility to get a bank account,” he said, “through simply downloading an app onto their smartphone, to be able to buy and sell.”

Marion Laboure, of Deutsche Bank, accepted the truth in this, but pressed the role of regulation in ensuring the currency and operators’ accountability. “We definitely need regulation in places where we are seeing more and more people investing in risky assets such as cryptocurrency; we need to make sure people know what they are doing, and there is a robust framework available to protect investment.”

While a lot of the discussion considered crypto’s potential to help people take back their financial sovereignty, perhaps the most pressing question moving forward is how central banks and governments around the world will now react. One of the most engaging sessions on ‘The Core’ stage saw panellists explore ‘How should CBDCs be designed and what function should they perform to become a trusted medium for payments?’.

De Nederlandsche Bank’s Inge van Dijk was generally bullish about the potential of CBDCs, with the Dutch central bank currently working on a retail CBDC to support the population’s increasingly cashless behaviour. While the shift to digital is certainly advanced, she did note the emergence of CBDCs means we’re all on the brink of something new, and we need to know how to stay in control. Banque de France’s Anne-Catherine Bohnert broadly agreed, highlighting the potential that CBDCs have to drive better financial inclusion.

“As citizens are now using cashless, central banks need to provide an alternative to central bank money and, as demand is increasing for digital payments, it’s important to provide this alternative,” she said.

Attendees also talked through the potential for improving interbank and cross-border payments through blockchain technology, particularly when it comes to cost reduction and the speeding up of settlement times. Seeing the focus both private and public sectors have on digital assets, it becomes clear that their march into the mainstream will only gather pace.

Unusual Partnerships

In the post-pandemic world, it’s accepted that partnerships and collaboration are more crucial than ever, and organisations from different sectors can come together to produce better financial services for a more demanding consumer. This concept was put under the spotlight in the session ‘How can we discover unexpected partnerships?’

Panellists name-checked Apple and Goldman Sachs’ tie-up, the SBI and Ripple partnership in the crypto space, and (of course!) George Clooney’s partnership with DNB Bank. Capgemini Invent’s Colin Payne said this kind of unexpected element can lead to the best partnerships, as different perspectives and diverse experiences collide. Arunan Tharmarajah from Wise agreed, pointing out that organisations need to start with the basic question of ‘why partner?’ to confirm a shared vision that will work.

Sendi Young, of Ripple, added that the way in which big tech entered financial services speaks volumes. Big tech found massive value in partnering and bringing in new players, with ‘strength in both camps’ meaning that both can come to the table and build something better. And partnerships can take multiple forms. In one of the event’s headline sessions, Julia Hoggett, CEO, London Stock Exchange (LSE), had a chat with Olga Zoutendijk, Director, Julius Baer Group, about how traditional institutions are partnering with fintechs and other new entrants.

Since 2014, the UK has produced twice as many unicorns as any other European country, and the LSE has played a major role in these companies scaling through listings. Hoggett had some good advice for ambitious founders who wish to list.

“It’s your process, own it,” she said. “The listing is how you function as a company for a long time to come. Do it your way – work with regulators and other companies, but find your own best way to market.”

Rise of Embedded Finance

One of the more eye-catching new partnerships announced at Money20/20 was between QNTMPAY, the digital banking partner of the McLaren F1 team, and embedded finance platform Railsbank. You couldn’t really miss the F1 car pulling into Railsbank’s exhibition stand for a pitstop. In a move that illustrates the growth in embedded finance, Railsbank will support QNTMPAY’s launch in the UK, where it plans to tap into the ‘fan economy’ worth around £8.5billion annually. Designed to enhance the F1 fan experience, QNTMPAY will offer rewards and experiences to fans to really drive loyalty, with McLaren Mastercard-branded debit cards on the horizon.

“Consumer brands are under pressure to keep hold of the digital grip of their customers or fans,” said Nigel Verdon, CEO and co-founder of Railsbank. “Brands must unlock untapped opportunities that can deliver relevant experiences to enhance their brand value. Embedding finance experiences into existing offerings is an attractive path for brands looking to increase regular engagement and revenues.”

Away from the exhibition space, one of the most well-attended breakout sessions covered partnerships between the platform giants, with a panel that included Netflix, Checkout.com and Spotify. The session highlighted embedded finance’s crucial role as a path for growth. Checkout.com’s Yael Barak explained that the platform’s success isn’t solely from products and services, but also from how they are embedded in users’ daily lives. She pointed out that this is a key learning for financial incumbents, those products are quite often still largely distributed using their own, long-established and sometimes creaking channels.

Maintaining Consumer Trust

Given the growth in open banking, and the plethora of new financial products and services available, a common thread was the importance of providing protection and education to the world’s consumers. Moderating a panel focussed on consumer trust and consent, Money20/20’s Kalita led a thought-provoking discussion about how today’s companies can build that trust with their customer base.

“We must be very respectful with personal data, and careful with showing what’s being done with it,” said Elena Alfaro from BBVA. “And we need to create services based on this data that are both meaningful and valuable to consumers.”

TransUnion’s Shail Deep agreed that data security is a major concern for consumers: “There needs to be transparency with consumers. They must be in control, and assured that the data is secure. Once these three elements are in place, we develop and establish trust.”

It’s reassuring to see the industry taking these issues seriously. After all, for all the talk of crypto and CBDCs at this year’s show, consumer trust remains the most valuable currency of all.

This article was published in The Paytech Magazine #09, Page 6-7