At the end of the key FinTech talk at Heureka 2015, FinLeap Venture Partner Nasir Zubairi had just one question for the audience: Who can build better FinTech solutions – startups, banks, or a collaboration between the two?
Most hands went up in favor of startups or collaboration – and, as you might’ve guessed, not a single hand went up for banks. The representative of Deutsche Bank, Beate Hofmann, nodded her head as if to say, “fair enough.”
Hofmann had mentioned several times throughout the talk that she knows Deutsche Bank has a lot of work to do. She named user experience as the main draw for FinTech companies, but also countered with the fact that Deutsche Bank has a deep, collective knowledge about finance. “My question is always how we can bring both of these worlds and strengths together,” she said.
Perhaps illustrating her point about bank strengths, Number26 founder and CEO Valentin Stalf later admitted that his company does not have any “traditional” bankers, but he also mentioned that the consumer doesn’t care about backgrounds of particular banking systems. For that reason, Number26 is very much focused on the consumer’s needs and the value created. “[The consumer] has an account in the U.S. and he has an account here [in Germany], and he wants to pay for something, and we just have to figure out the easiest way to do that,” Stalf said.
Stalf also firmly believes bank branches are quickly becoming obsolete and aren’t worth the costs anymore, countering Zubairi’s interjection that bank branches still serve an important purpose for many people.
PayPal Regional Vice President and GM Arnulf Keese, the quietest of the bunch, made a notable statement about product focus, saying he’d rather be adaptive to other technologies to achieve one single mission rather than try to accomplish it all. “We don’t even try to be good with 10 things,” he said. “We try to be good at one thing.”
Arguably the most illuminating aspects of the talk were Deutsche Bank’s outward acceptance of FinTech advantages, and the clear disagreement between tech figures about the functionality of bank branches in 2015. It will be interesting to monitor how these perspectives change, if at all, by the end of the year.
Interesting insights from the talk, thanks for writing this up. I’d be surprised if many people share Valentin’s assumption that consumers don’t care about the background of a particular baking system.
There’s great value in transparency. For financial services companies trying to shake up the industry, they need to show a certain degree of legitimacy. That could be founders’ experience, customer reviews, a solid blog…
Just as a reference, here’s a graphic of the startup companies challenging European banks like BNP, Santander and HSBC:
https://www.cbinsights.com/blog/disrupting-european-banking-fintech-startups/
It is now widely believed that the combination of two (algorithms and human talent) will win the race in the industry of investment advice. Here is the link to an insightful research from McKinsey: http://www.riabiz.com/a/4984545384333312/mckinsey-robo-advisors-have-a-cloudy-future-but-virtual-advice-delivered-by-24-hour-super-centers-experts-and-algorithms-will-win-the-day In the meantime, I wanted to recommend you a service that dramatically decreases the cost of investment advice by applying technology and makes the entire investment experience convenient. It’s called Zen Assets. The firm operates in London, UK: https://zenassets.com/