FinovateFall 2016—Banking Innovation Isn’t Coming Soon, It’s Already Here

As usual, last week’s Finovate event offered a great mix of innovation across many areas of financial services. Anyone who has attended knows it is an amazing fire hose of content and smart people. Having attended almost every year since the first conference (this year’s event was the 10-year anniversary) it is great to see how the event has expanded in both geography and attendance.

There were a few themes that really stood out throughout the presentations and side discussions:

Coopetition and API Banking

This is possibly one of the clearest themes. Well-established financial services players and emerging players are looking at ways to break down financial services tasks into smaller, more specific services executed flawlessly. This means financial institutions and technology providers can piece together more feature-rich solutions, take cost out of existing services, and present cutting-edge capabilities for customers.

Most organizations that are offering and consuming APIs for banking services rely on RESTful application programming interfaces (APIs) and JSON data interchange. Leveraging these standards and easily consumable APIs improves time to market and decreases IT project overhead, resulting in better products, better user experiences, lower costs, and greater agility.

This approach represents a substantial shift from a “walled garden” approach, where a financial institution must “own” every aspect of the customer relationship and customer data. Today, financial institutions can effectively “outsource” certain aspects of product delivery, take advantage of the newest technologies without major capital investment, and offer great customer experiences.

This impacts nearly every area of financial services from retail banking to wholesale banking and payments, investments and retirements, risk management, fraud, and authentication. With access to new sources of data and advanced analytics, institutions can gather more intelligence, create more customer interaction points, and generate more revenue.

PFM Resurgence

Starting with the first Finovate event, personal financial management (PFM) platforms of many kinds have been highlighted. After a few years with little new activity, PFM is coming back strong, particularly on mobile. This is allowing new vendors to offer a new PFM experience right when customers need it—in the store before they make a purchase.

Even more interesting is how these apps are leveraging technologies such as natural language processing, voice recognition, and artificial intelligence to allow end users to simply ask questions about their financial health and get actionable answers in real time. The value of PFM on mobile is an order of magnitude greater compared to the desktop web for many end customers. The right information, at the right time, provides context for users’ purchasing decisions and offers a powerful touch point to interact with the customer and provide offers and advice.

As consumers have become more comfortable talking to their devices through technologies such as Apple’s Siri, Google Now, and Amazon Echo’s Alexa, voice control becomes a key feature to encourage users to interact more frequently with PFM applications, driving better consumer decisions while also providing more touch points for offers.

Optimizing the Lending Process

A number of vendors demonstrated APIs and/or apps that make consumer and small-and-midsize-business loan underwriting faster for consumers and more targeted for financial institutions. Big-data analysis helps target the right offers to the right people at the right time, and also helps manage risk.

Blockchain Technologies

Blockchain technology was in force again this year, moving far beyond cryptocurrencies (and bitcoin in particular) and toward much higher-value use cases. The use cases range from trade finance to securities trading to business-to-business and business-to-consumer payments, identity management, and more. Smart contracts allow blockchain solutions to solve many more challenges than simple currency exchange, provide greater transparency, and help automate a number of error-prone manual processes around record keeping.

There are so many potential use cases that financial institution and vendors, large and small, are doing experiments, trials, and proofs of concept in a variety of different areas. It remains to be seen which use cases will provide the greatest efficiencies and cost savings; it is very clear there are at least a few that are compelling enough to drive some serious process improvements.


As usual, FinovateFall 2016 was a success with many interesting new products demonstrated from both well-established financial technology providers and young startups. We’re looking forward to FinovateEurope in London, February 7 and 8, 2017. Enter promo code Aite20 to get a 20% discount on your registration.

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