This story was migrated from our old blog, originally published on December 25th, 2020.
New Blog
This blog post first appeared first on old medium publication (https://medium.com/startuprad-io), and was moved to this blog with the relaunch of our website in summer 2024.
The Fintech Review is one of the annual traditions of Joe, established in 2014 (2014 fintech review in German). Ever since shortly before Christmas we get together with Fintech entrepreneurs, event organizers, and thought leaders to look back at the year and forward to the new one in our fintech review. You can find the ones in English here on YouTube:
Tune in to our Internet Radio Station here:
Subscribe Here
Find all options to subscribe to our newsletter, podcast, YouTube channel, or listen to our internet radio station here:
Our Sponsor Startupraven
The best way to identify investors and cooperation partners for early-stage startups. Sign up for early access here:
In this Fintech Review, we talk to
Paolo Sironi, Fintech Thought Leader, Author (https://www.linkedin.com/in/thepsironi/)
Frank Schwab, Co-Founder Fintech Forum (https://www.linkedin.com/in/frankschwab/)
Luka Ivicevic, Fintech Entrepreneur, Forbes 30 under 30 (linkedin.com/in/luka-ivicevic/)
Paolos Top 3 News
Ant Financial IPO
Singapore allows fully digital bank license
3b
Starling digital bank posts first profit
Paolo’s 2020 impact
Digitalization increases, evaluations declining
Franks Top 3 News
Cash is still increasing ⇒ Cash in circulation in Germany increasing ⇒ Virtual ATM Songmic
Pandemic ⇒ All becomes digital
Moving from CrowdFunding ⇒ Government Help for Startups: Capilendo
The Video Interview is set to go live on Friday, December 25nd, 16.00 CET (Frankfurt/Zurich/Paris/Milan)
The Audio Interview
Automated Transcript
[0:00] Music.
[0:08] That I owe you were podcast and YouTube blog covering the German startups.With News interviews and Live Events.
[0:21] Hello and welcome everybody this is Joe from celebrated our or your startup podcast and you to block from Germany every year shortly before Christmas we get together with fintech entrepreneursevent organizers and thought leaders to look back on the year and forward into the new one in our annual fintech reviewthis is a tradition I’m hosting since 2014 you can find here in the playlist on YouTube as well as down here in the show notes the lastthree once.In English this time we changed a little bit the concept you know 2020 nothing stains as it is we did the following we talked to all 3 of our guests separately.
[1:08] And only asked them three simple questions then we added,10 together this doesn’t unfortunately lead to any of the interesting discussions but it’s a little bit more compact format,did the three questions where what are you top 3 fintech news items from 2020.What do you think is the medium to long-term impact of Corona and 2020 on fintech and what is your outlook for fintech especially in 2021.
[1:46] Let’s see how they answered guys what are your top 3 fintech news items from 2020.I think 20/20 was an exceptional year and the many aspects certainly for fintech first of all.The and financial IPO there was blocked by the Chinese regulator two days before that happened that is really unprecedented.Because it highlights the limitations of big tech companies in terms of accessing financial markets and providing opportunities.
[2:18] Two individuals is more middle in printer printers without hitting on the problem of a financial stability so we might expect there will be.More regulation in China and outside China about the functioning of big deck which will have an effect and impact on the way fintech will have to operate the going forward.The second is again about big Tech,again at the end of this 2020 the reverie launch of Google payunder a new more integrated solution and look and feel and the announcement of their plexus service nine next year that aggregated the interest already of more than 10 financial institutions that this is alsoa great piece of news them.It highlights the capability of big Decker to penetrate the banking sector providing I believe that banking infrastructure by inviting financial institutions to onboard on their capability to connect them,to final consumers so don’t think that here we are discussing the competition between the big Tech.And the financial institutions but in acceleration of the capability of financial institutions to play with technology in terms of accessing,the capability of large providers of financial services Solutions in order to improve their operations and then the third day.
[3:45] And there wouldn’t say the least but we only wanted to discuss three is the final decision of the monetary Authority in Singapura to award the four contests and proposed proponents a banking license,we have two food digital licenses now given to grab think they’ll and SCA,and we have to wholesale a digital banking license has provided to and financial and Greenland Financial Holdings here and again there are two players which are entering Singapura with digital banking license so in essence theplatform ocation of financial services from within China is expanding to the Western water,2020 1 is going to be very interesting,if I can just add a little fourth or a 3 B I would say that this year Sterling Bank is finally achieving,profit in their operations that that’s very important stylingto me is very different that to the other new bank in charger Banks because they have a more clear focus on small enterpreneurs and the type ofbusinesses that I always highlight that the relevance of understanding the motivation of fine and clients to unboard on digital not simply on three models.
[5:05] But on business models where they’re asked to pay for the services they receive and it seems that styling owning these slight difference compared to the others as showcases thatthis is the way forward because before other competitors managed to improve federal financial situation.
[5:26] I really love that you added a freebie news item one question from my sight did you dig a little bitdeeper into why stalling was actually profitable and do you believe it’s the blueprint or the way to go forward for banks like and 26 painter or other Challenger banks in other countries or geographies.
[5:52] Well you seeand many fintech enterpreneur side say Silicon Valley in general misunderstood the asymmetry of information that dominates the revenue-generating mechanism in financial services so mobile technology I insist,is Apple technology a technology of the demand While most of the services that Banks provided to the customers especiallywhere the Raven is made at today are operated in an office driven mechanism so the problem is how you move are you basically take enough for driven industry which is pushedinto demand-driven technology where clients have to pull now.
[6:34] You need to look at the symmetrical offers where people feel they have a pain point they have to resolve and they’re willing to pay for thatnow payment methodsthey can become convenient and very attractive but people typically don’t want to pay for payment method so see what I’m saying as long as they really feel like they get extra like American Express with the membership rewards there is so much 1990s put it this way butintrapreneurs they have their a pain points in front of themselves every hour of the day especially through the pandemic.You don’t think about for example your retirement and investment product continuously very few people do that.But everybody working is thinking about their business problems throughout the day,therefore if you target those communities you have more chances to resonate so that you can see the clients might on board and they’re willing to pay for value.They receive because effectively the resolver some real critical points in their business journey and there is a belief that the legal element more than anything else,that tells us the styling story apart from.
[7:51] From other Challenger Banks and other new Banks then of course there might be other type of business decisions that were madebut I insisted we need to look at the foundations of the way people Access Financial Services on the symptom information and therefore their willingness to understand their perceived value soto pay for that so what did strike me first was that cash is still relevant.So in in in context of digitization.That’s actually the last thing you would think about so it did strike me that months by months the amount of cash in Germany is still increasing.So the volumes overall are increasing of course if you look from a percentage point of view.Cash losses but but in absolute numbers Cash.Increases month by month in Germany and I did come across a start-up who transforms.
[8:59] Cash machines.And and cashiers into digital ATMs the company is called Sonic and that was my first big surprise but that’s already are still happening in 2020.The other big news for me worse.Fintech form must go digital so we always look about digitalization of the financial industry but our own event,what’s the pure physically one but this year it had to be transformed into a pure digital one and I can really tell you,my own digital learning curve curve was really really Steep and.I learned a lot and I had to learn new things and need to transform the way we approach the delivery of the fintech Forum.So that was the second pick.Event and back in sick the second big news for me and and finally.I was surprised by.Especially one startup in the crowd fine crowd Finance space copy lender they actually.
[10:19] Transform part of their business model in order to help SME companies to get governmental support and they did.That rather quickly and I have seen more and more startups really.
[10:39] Taking the challenge in order to support the overall community in Germany.So these are my three new so cash still relevant.Yes I need to become digital by myself personally and there are some startups out there who are able to really quickly transform themselves.
[11:05] I think there’s just a main main just one news that encompasses maybe all 10which is which is just the fast-forwarding of the inevitable which is a bringing what’s offline to online so anything that’s,that’s currently Banking and that’s offline is just accelerating and be coming online,no I think you can absolutely automate everything I think you just a matter of it’s a question of time and logic.
[11:33] That you can do that key and what do you think is the medium to long-term impact of Corona and 20/20,on fintech so depending Mika break is an unfortunate event of course there’s nothing positive about that.But I think that it is also accelerating digital adoption which in essence is good for those,how to get seeing the transformation of banking with mobile technology so let’s say they’re from the negative side uncertainty is on the rise and financial markets and when answered it is so high the capability of,players to be offered driven is reduced that means the evaluations cannot stay where the weather before I depend Amica break and this is hitting most likely the wayfinding is accessedbye — fintech interpreters and if not the full availability of funding itself I heard the many investors pulling the breakat the beginning of this year trying to understand what was effectively going on before deciding,to move into a new Venture so it may be that the established players that already got funded my.Find the chance for the neuron Dubai will be more difficult for the newcomers to access flash money.
[12:59] At the same time we said that the pandemic has accelerated digital adoption in the society with particular reference to the Western world as we know that.The Chinese consumers were already highly digital,and this is putting extra pressure to the banks and to change the way they provide their services to the phallic customers so definitely,not necessarily the fintech having more clients but all those fintech providing B to b or B to B Solutions should find themselves into a new environment starting from 2021 where I believe they will be.More and substantial and practical demand beyond the pocs to effectively deliver in production new banking services using digital technology.
[13:48] And if I can also highlight this is the third year for example of.The growth of digital Platforms in India had the chance of working with.As bi your noise IBM which is a very interesting applications and Marketplace that was launched by State Bank of India now we all need to look at that because often we talk about China and we don’t talk much about India.But this is a great example of building a platform Marketplace,that engages clients on non banking products mm and then uses the relationship to turn the clients into a banking relationship and this is exactly what the fintech and the banks have to learn to resolve them.How to recombine with contextual banking the non-banking with the banking charters,we saw in the last two years the first real life examples are being brought to Market and some of them like this one very successful,and I believe that 2021 2022 up to 2025 will see the acceleration of this type of approaches and solutions which are definitely needed from my perspective.Depending me couldn’t Corona is accelerating everything which is related.
[15:13] To digitalization so staff which takes.
[15:20] In normal times 2 3 4 years now happens in two three months.
[15:29] So we see in areas of payments and contactless payments and.
[15:37] Let’s say digital loan we see.
[15:41] Significant increases across the world so we not only see your online merchants and Amazon growing like hell.But also the underlying infrastructure as well as the financial service infrastructure including.Fintech who are prepared to scale.
[16:06] And that’s for me the prediction first of all the Lessons Learned but also to prediction for next year.The ones with a proper business model will benefit the ones with.
[16:25] Bad business model will fail so we will see some will succeed faster.
[16:31] Other will fail fast so the acceleration of what.Happens normally that’s the big topic also for the next two years.
[16:46] From a digitization perspective I think that the vaccine coming out earlier is actually a bad thing,again I want to emphasize from a digitization perspective because it’s not forcing or sensually it’s allowing certain companies to go back to the old ways quicker than before I still think Coronais going to be impacting our lives for the next five years for the foreseeable futurebut but I think it’s important that that we just speed up that digitization of.
[17:18] Bringing things from offline to online what is your outlook for fintech in 2021.In 2021 I did among the many works I I did worked wild an interesting one with the Chinese Bank.And there is a strategic point of view for the board of directors of Shanghai pudong Development Bank which is.The eighth largest bank in China as big as Dodge back that means not that big of a bank but the most digital among the European Banks.And we wrapped up the Strategic work into a public white paper which has been published at the and financial conference,in when was it October this year October November in Shanghai.
[18:08] And this title of this white paper is panoramic banking now it is published in Chinese only there’s not an English edition that I think this is very important because finally,we have,consistent point of view about the platform occasion of financial services so between 2010 and 2020 which are formed let’s say formerly the.First 10 years of the fintech Innovation we saw a lot of simplemindedness in different ecosystems so small fintech some of them growing faster,wanted to unbundle financial services into linear offers and more simplified Solutions,however this is not the end of the game and actually is a food that starting point.Because digital are reveals that only platforms that can effectively tribe.
[19:09] So I think that now many are getting into the understanding that what is needed is not to unbundle financial services but to bundle the deck.That’s why I’m very proud of this work that we release the at the end of 2020 because I’m from 20/21 to 2030,I believe that we will see this shift from unbundling to bundling back there for the rise of platforms so it is very important to understand what it means to shift from,the linear economy that is an output economy into the nonlinear economy which is made of outcome economies and only thanks and fintech understand that.They will known how to build that platforms that enables to aggregate the life of individuals and interpreters in different ways if I can say to conclude that,I’ve always been critical I did yes that you can unbundle a bank,because banks are already and bundled into different business units and have always been critical at the fact that we started looking at fintech by more thing that offers around unbundled Banks like.People talk of pay tech of credit Tech of Ensure Techof well Tech in reality is all about client Tech because the client is only one and that is where you see the capability of platforms of treating the client in his own,uniqueness and centricity.
[20:35] If I can add that we only need we also need to transform the client centricity into human centricity that means stop thinking,it official intelligence and data are there to optimize distribution Channel products that means putting the client in the center and becoming smarter at doing marketing because this is not e-commerce,this is Banking and Financial markets highly regulated there to make sure that our society functions in a democracy and in capitalistic board we need therefore to start learning that would.Data analytics are for is to enable clients to be capable of self-directing themselves on the platform economy that means being human Centricbecause it’s not any more about the data-driven banking it becomes data enabling clients and that’s my wish for the next 10 years.
[21:29] Yeah that that’s basically my assumption that maybe not next year.Alone but definitely next year will be in a very important here anyway we were at.Kind of Crossroad for fintech because fintech the around for 10 years 12 years now in Germany may be 7 to 10 years.So we already have seen 300 fintech s’ disappearing.
[22:04] From about 1000 so that’s something I expect to accelerate actually over the next two years.
[22:15] As I said before.Acceleration of time that that’s probably what we all need to understand so I Megan John’s and actually wrote a good article call the the banks are dead long live the banks.And I think that’s her that’s never been more true I actually actually think that.That it’s a super crowded Market I think less newcomers are going to come out I think that the existing players.Are going to be doubling down on on General Innovation and fintech so if I was a fintech entrepreneur.For most cases I’d probably leave out trading from that but other than that I probably wouldn’t start fintech company so I think that people need to take a long-term or Outlook I think people are too short-sighted when they think about Challenger banking.
[23:06] If you look at for example you know the oil boom in the late eighteen hundreds and everybody thinks now wow that’s obvious.So it’s the same thing now it’s kind of a it’s the second time in history that that banks are being recreated.If you extrapolate and think about what is banking and 10 years from now or maybe even 20 years from now there’s absolutely no doubt that it’s online than that it’s digital so whether that’s.A challenger Bank like one of us or a Deutsche Bank that’s up for questions but it’s the same question like will there be more electric cars on the road in 10 years from now absolutely well Tesla be one of the winners most probably.
[23:46] Thank you so much leave us feedback via Google forms in the comment below here and don’t forget to like And subscribefull vinyl Merry Christmas we will be back on January 7th with our interview of bid bonds bye-bye why have I not.Yeah thank you for your time and happy too near to the audience.
[24:17] Music.
Comments