2017 Finovate Trends, Highlights and Lowlights

I’ve watched a lot of Finovate clips and videos on YouTube and I’ve heard Martin tell many a story on what Finovate is all about and how to approach it.  However, this year I attended Finovate for the first time in San Jose, and like most global spectacles, an in person perspective is priceless.

For those that don’t know, Finovate is a demo only format event where presenters get 7 minutes to demo something innovative in the FinTech space.  No slides or videos are allowed.  You need to demo working software and you have 7 minutes to convey the innovation behind your product before a loud bell sounds and you get physically ushered off the stage.  The rules are strict and the host is spectacularly good and coordinating, inspiring and enforcing these rules where appropriate.

For me Finovate is the perfect opportunity to see the actual trends of where people in the FinTech space are focusing their energies.  Last year was mostly about AI, BlockChain and “Banking for the Unbanked”, so I was curious to see where the trends had moved this year.  I decided to get a little scientific and plotted some data about the presentations.

Finovate Trends 2017

* Even though there is some overlap, as an example a lot of the presentations incorporate AI at some level, the AI category is just for solutions focused on AI specifically.

To my surprise there was an overwhelming large number of Loan Origination Optimization solutions.  Is this an indication of a housing boom in the US?  Or is it that there is an influx of Millennials buying their first homes and there is a new level of customer experience that FIs are expected to attain?  Either way, it was certainly not what I was expecting.  If you add the pure KYC based solutions to the tally, which are typically used to optimize the loan origination process, and combine this with two of the presentations I’ve classified in the “Everything Else” category that were property related, something is brewing.

* About the Everything Else category above, this is where I’ve grouped everyone that I felt stood on their own and cannot really be put into a group.

One thing that stood out is the eerie absence of new Blockchain based solutions.  Perhaps that’s not surprising considering $1bn has been invested so far into Blockchain in the US banking sector and there is exactly $0 in revenue so far reported and nothing actually in production in the banking sector.  It’s as if the successes of Bitcoin and Ether as crypto currencies immediately implies that Blockchain has to be successful in the banking sector for smart contracts or recon processes or whatever people think up next.  It’s like a solution waiting for a problem.  It’s slow, has a limited security time window and not even that innovative anymore – take AI and Quantum computers and put them together into some malware and the Blockchain ledgers will get corrupted across the globe within milliseconds.  Don’t get me wrong, it’s that I’m not a BlockChain fan, and I believe there are opportunities for it outside of banking, possibly government, legal and pharmaceutical sectors.  It’s just that I’m waiting for it to go past the peak of inflated expectations so we can get to the trough of disillusionment.  Maybe that just happened.

In the above I also plotted how many of the presentations spoke about having available APIs that could be exposed to developers and FIs.  With all the pressure with PSD2 in Europe for FIs to open their APIs to the world I was expecting there to be a much higher focus on API availability, but the data seemed to prove otherwise.  Of all the presenters, only ~28% of them offered APIs and more than 70% either hadn’t gotten around to it yet or weren’t ever going to expose an API because of the nature of their product (which is understandable in some cases).

API Trends

To me this is symptomatic of two possible things.  The first is that the pressure for open APIs from Financial Institutions is not as prevalent yet in the US like it is in Europe and other parts of the world.  What is possibly a more alarming conjecture being that perhaps, because these new innovators are startups, they’ve rushed their development and engineering pieces to get their product to market and haven’t architected them properly with a solid foundation of APIs and/or SDKs followed by the User Experience and engagement channels.  This presents a fantastic opportunity for a product like FutureBank, because, if these innovations get traction they will need to build out their products at scale and facilitate integration with the Financial Institutions, and FutureBank does just that.

We are hoping to get a 7-minute window at Finovate New York in September this year to showcase how quickly we can spin up a brand new FutureBank instance that integrates with most core banking systems and exposes APIs for FinTechs to integrate into.  I believe our product will be invaluable to all the new innovative FinTech’s coming out of the woodwork every year who at some point in their success stories will need to integrate with FIs quickly and seamlessly and have their solutions scale to meet demand, and I hope FutureBank is their secret weapon.

Finally, some highlights and lowlights.

The highlights were:

  • Capitalise (Natural language processing so you can talk your investment ideas and the AI builds the trading algorithms for you and publishes them to a trading algorithm marketplace – wow right!),
  • Jumio (the best of the KYC solutions with incredible OCR and video technology),
  • MicroBlink (Receipt processing via image recognition) and NCR (VR training solutions for remote workforces in the banking industry working on ATMs and the like).
  • In general, the emergence of more sophisticated Financial Robo Advisory tools (watch out for FutureBank’s Investment Management features coming out next year) was a highlight.

There was only one lowlight.  Turn Key Lender was so embarrassingly unprepared that it was kind of an insult to the attendees who’ve spent good money getting to the event.  They may have a great product, but I just couldn’t get past the lack of preparation in the presentation.  If you are going to be presenting at Finovate in the future, remember to take some of Martin’s advice.