Last Friday, I had the pleasure to be invited to the White House’s FinTech Summit, where, as the Wall Street Journal reported, the half-day event “largely focused on how government agencies can tap into the innovation, in which new firms are offering small-business owners and consumers faster forms of loans and digital payments.” Certainly, collaboration between technology companies and traditional financial institutions has increased — think proofs of concept, partnerships and strategic investments — but much still needs to be done. As I took notes during the event, I did so with an eye towards the platform we built — and the ecosystem beginning to develop — with FinXTech.
FinXTech is a platform that promotes collaboration between the most forward thinkers in the industry – in order to create real innovation, change and a better future for all.
As new technology players emerge and traditional participants begin to transform their business models, there is growing sentiment that successful institutions need to enable financial services for life’s needs through collaboration and partnerships with the very fintech companies that once threatened to displace them. I tackled this issue in a piece I wrote (A Fear of Missing Out). A few things didn’t make the final cut that I thought to share here. Of note:
- I asked Michael Tang, partner and head of global digital transformation and innovation at Deloitte, how might bank executives determine the amount of money they should allocate to innovation. He shared that industry metrics range from 2-7% of revenues (and also depend on incremental or moonshots-type initiatives).
- Even as technology will force narrowing margins, there may be opportunities to develop new profit pools and forcing some incumbents to “move upstream” to serve more sophisticated and profitable cohorts (source: Disaggregating the impact of fintech).
- The playing field will level as firms of all sizes will be able to take advantage of emerging networks and platform-based services. Ultimately lowering cost, improving compliance, and focusing on markets where they have a true competitive advantage (source: Disaggregating the impact of fintech).
The rapid transformation of the financial services industry — due to technological innovations and shifting customer expectations — is quite remarkable. If you missed what Adrienne Harris, special assistant to the president for economic policy, wrote in a blog post following the White House FinTech Summit, it is worth your time to read.