I tell the story of ‘My first hackathon’ often. It lives as the intro to a keynote address, I give called ‘The Fintech Mindset’. Quite simply, the story goes like this:
A PR friend of mine invites me to ‘London’s first payments hackathon’ at Google Campus in East London. Now, I had no idea what a ‘hackathon’ was, at the time. She explained.
‘So, let me get this straight,’ I replied. ‘A bunch of people are going to spend the weekend in a basement in Shoreditch to build payments apps … for fun?’ (that line always gets a laugh 😊 )
I was assured that there would also be free pizza, beer and t-shirts.
I decided to give it a chance. After all, at that time I had spent most of my career writing about how banks used data and technology to move money around the world and basically keep the lights on in Canary Wharf. I might as well see what the ‘young kids in t-shirts’ had to say.
But when I arrived at Google Campus, and grabbed my free beer, I came face to face with people I knew, who worked at banks. That was when it hit me. That was when financial technology became ‘Fintech’ for me. My ‘Fintech moment’ wasn’t populated solely by 20-year-olds in startup t-shirts who couldn’t tell their SEPAs from their Target2Securities. The ‘Fintech as a mindset’ change was coming from inside the house.
Not everyone agreed with me at the time, and many still don’t. For me, Fintech wasn’t a set of companies or a sector or a contactless app to allow you to digitally donate to the Salvation Army at Christmas. Fintech was a mindset – a group of people, from many different companies – who wanted to make banking better.
That hackathon was held in 2013. Last week Google Campus announced its East London venue would not reopen once lockdown measures eased.
— Google for Startups UK (@GoogleStartupUK) June 21, 2021
Although painted as a victim of the long COVID impact we will be feeling as a society for years to come, I feel there is more at fault.
There is change in the air – a reckoning of what we have all lived through over the past decade.
Has everything we think we know about Fintech been a lie?
The height of Fintech in London was a scene I was very much involved in. I walked around a soon-to-be launched Level 39 in Canary Wharf. I sat in the front row (slightly perplexed at not being to ask then Chancellor of the Exchequer George Osbourne any questions) when Innovation Finance was born. I was in Hong Kong when SWIFT did a soft launch of what would become Innotribe. I watched startups toil away in a mouse-invested, sauna-like basement at Startupbootcamp, and got on stage with an HSBC board member at the first European Money 2020. I drank Espresso Martini’s at Lloyds Banking Group and hosted panels at Barclays Rise (I’m sorry Rise, powered by Barclays 😉). I was on podcasts, wrote blogs, produced reports, was asked to talk about money laundering, bitcoin and … gin … on BBC radio and TV.
I co-founded a cocktail club for us Fintech types and was on the founding team that launched a new Festival for this industry we all call ‘Fintech’. I need not discuss ‘the lists’.
But what have we really done? What has improved? Is banking really better or just … different? How many of us, who have been in the trenches of Fintech, have sat and watched a very senior person at a global bank talk about the ‘importance of partnering with new FinTech entrants’ or how committed they are to the principals of Open Banking and Open Finance and thought: ‘liar, lair pants on fire!’.?
I’ve sat with bankers (who do know their SEPAs from their Target2Securities) while they wring their hands in frustration at the barriers put in front of them to innovate their organizations. All this frustration, after having to sit through a tirade from a ‘Fintech Challenger’ on a far-flung stage talk about how bankers need to ‘innovate or die’, but really, they should just die as the future isn’t with their old, creaky, legacy firms anyway.
I’ve seen startups, desperately looking for any crumb, any help from large banks – the right person to speak to, a small nudge in the correct direction – only to get rebuffed with a condescending smirk and a dismissive wave.
I’ve watched lonely salespeople, wander around empty booths at trade shows – having been tricked in buying a stand in order to meet the C-Level speakers listed on the agenda that never set foot in the hall – with the common people. (not ours)
I’ve patted myself on the back thinking – with all this listening to the stories of those who make up the Fintech ecosystem – that I could create a community, a space, an event, that would be different. I tricked myself into thinking I was part of the solution and not part of the problem.
The issue is I no longer know difference between the problem and the solution. Is this idea that Fintech has a been a force, and a movement – that there is something called ‘the FinTech Mindset’ – been perpetuating a myth? In my darkest moments I look back at so many episodes in my career and think ‘was I just arranging the decks chairs on the Titanic?’ and congratulating myself for it?
I know we are all emerging from a very dark time – the light at the end of the COVID tunnel is in sight, but it is not yet the dawn. But change is in the air – a recorking, a re -look at the assumptions and conventional wisdom we all, once, held dear. I am not alone.
The wonderful Theo Lau, the founder of Unconventional Ventures and FoF (Friend of the Festival) indulged me with a rant.
“And … oh Fintech Fintech. Where shall we start? Midsummer night’s dream? Or The Inception? Chasing the impossible dream?” <==This is how she starts. I love Theo.
“While we have seen an explosion of consumer Fintech startups in the past 10+ years, targeting different areas of the market from budgeting and personal finance to investing and lending, etc…, are we doing enough to help those who are most in need? How are we helping those who must make trade-offs between getting essential medicines versus paying rent? Or those who are struggling to put food on the table, despite working two jobs?
The answer is, increasingly, we aren’t.” <==Preach Theo! The world does not need yet another electric scooter or rapid grocery delivery app.
She goes on: “Naive? Arrogance? Perhaps a little bit of both. Perhaps we have ignored the fundamentals. Perhaps we have underestimated what it takes to play the game. Or perhaps we have been asking the wrong question all along. Instead of obsessing with ‘Do we need to be banks to offer financial services’, we should be asking, who will customers trust with their money and their data and why?
Or perhaps we are so close to it that we are overly obsessed with building a beautiful wrapper, that we forgot to take a step back and think about who we are building for and why? Perhaps we have ignored our own advice – and took too much comfort in building what we thought we know best and are familiar with – instead of looking at what the market truly needs, and how we go about getting there.
So, we end up with mini replicas of the old model, with a new paint.” <==That was hard, Theo, I felt that.
And here comes the truth. “Because change is hard. Because change requires power and wealth. The incentive structure simply is not there to create new models and new value prop – to truly change the status quo.
So, we create happy slogans and illusions of change. We paint the logo green for Earth Day, and paint it rainbow for Pride Month. We celebrate small successes and pat ourselves in the back. We celebrate big funding rounds and marvel at how we have moved mountains.” <==Heart ripped from chest, still beating, … as I die.
These are hard questions. These are hard ideas. We should not shy away from them. And guess what, folks….Fintech Talents is not. 😊
The Big Idea Debate – Everything you think you know about Fintech is false
Fintech is a disruptive force set to unbundle and dismantle traditional financial services. Fintech is a set of companies, newly formed, that used emerging tech and innovative business models. Fintech is everywhere and every company will be one. FinTech is a living ecosystem of incumbent players, startups, progressive tech providers and forward-looking thinkers seeking to make financial services better.
Fintech, the portmanteau of financial technology, has had many definitions over the years.
Is the media narrative of Fintech – our lived reality? Have financial services become better in the past decade? Where are the truly transformative companies and successful partnerships? Why do we, as an industry, continue to have the same conversations around innovation, progress and meeting the needs of the customers year after year after year … with very little change?
Have we all just woken up from the era of Fintech in 2021 and found it has all been a dream?
- Nick Fahy, Chief Executive Officer, Cynergy Bank
- Claire Calmejane, Chief Innovation Officer, Société Générale
- More Speakers TBC soon!
Peace out, Liz 😊