Fintech is hot! Whether you measure it in column inches written, conferences held or dollars invested, it’s one of the biggest stories in financial services today. As well as the flotilla of start-ups looking to make their fortunes or at least make a difference, the big banks are in on the act, facilitating activity through accelerators, hubs and conferences, as well as setting up their own internal innovation teams. And it’s not just the big banks – the internet giants Apple, Google, PayPal etc are very active, as are a number of major players in hardware and services, from Samsung to Worldpay, Ingenico to Alipay. So what’s created this buzz and what’s really happening, when you strip away the hype and the noise?
While I have spent most of my career in retail banking and payments, two areas at the heart of the Fintech space, I’ve been working in the pensions sector for the last eight years, building NEST Pensions for the UK government. I’m now re-entering payments with my own brand new digital cash venture, Tibado, so I hope I can reflect and comment both from the perspective of being a participant in, as well as an observer of, the Fintech phenomenon!
Firstly, it’s very patchy. There’s lots happening around retail FX and remittances, very little in insurance – so far! Lots in peer to peer lending, less in trade finance – but watch out for shared ledgers! Lots around robo advice, less in robo administration!
Second, as is always the case, some people get overexcited and seem temporarily to suspend their critical faculties – there’s certainly been some of that around the Bitcoin/Blockchain world, as well as the extravagant projections some still make for peer to peer lending volumes, when this type of lending does not lead to the creation of credit.
Third, there are far too many people chasing the same opportunities, so there’s going to be a lot of disappointed start-ups, VCs, consultants and service providers as things shake out.
Fourth, most of the initiatives are incremental to the fundamentals of the sector. So lots of people want to make it easier to pay with a bank payment card, lots want to make interbank transfers better, lots more want to create a better credit scoring model or more sophisticated biometric authentication solution to access existing financial services.
So is there anyone doing something - in payments, for example - that’s really new? Well, I hope you will excuse the shameless self-promotion but my business partner Dr David Everett and I are developing a new fiat (i.e. pounds, dollars, yen, etc, not crypto-currency) digital cash product called Tibado. It doesn’t run on the bankcard rails, it isn’t necessarily anything to do with banks and bank accounts but it just might eventually transform retail banking . . . now that’s what I call high-octane Fintech!
Tim Jones CBE
Tim Jones | +44 7775 742 820 | firstname.lastname@example.org