MoneyConf 2016: Banking Goes Digital

After its debut in Belfast last year, MoneyConf 2016 was held in Madrid. The venue was La Nave, a brand new conference hall a 30-minute drive from the city center. At least the attendees were not distracted during the day by the great capital of Spain’s seductions.

MoneyConf is an invite-only event “focused on the future of finance.” One of its goals is to bring together startups and investors, so startups can learn from established practitioners and pitch their value to potential investors. The range of startup propositions present was quite diverse, basically covering the whole financial services space.

Looking more specifically at retail banking and payments, I would like to highlight a few themes.

Cloud banking is a trend to watch. Norwegian Auka, for instance, provides a payment platform that runs completely on Google Cloud. Auka is a white-labeled mobile payments platform that is powering mCash in Norway, and it is now deployed by 17 banks using a Platform-as-a-Service (PaaS) model. Holvi (acquired by BBVA this year), is a licensed payment institution that runs a core banking platform in the cloud to serve small and micro businesses in Europe. Holvi provides a current account together with the financial tools required to manage payments and small-business financial administration.

Mobile payments are being rolled out globally. While NFC is certainly the future for mobile proximity payments, its global rollout will take many years, and innovators are using bridging technologies to bring mobile payment solutions to market. YellowPepper is successful with mobile banking in Latin America and launched a mobile wallet (at first in Mexico) called Yepex. The company uses tokenization to make card payments via the wallet more secure. For each payment, a unique token is generated that can either be communicated to the merchant manually or via host card emulation (HCE) or QR code. By using this token system, neither merchants nor customers need to be NFC-enabled before they can do mobile payments. Blue Code, developed in Austria by Secure Payment Technologies, is a mobile payment scheme that uses a stripe code to allow users to pay online as well as in store. Blue Code will also be introduced in Germany. Samsung launched its digital wallet, Samsung Pay, in Spain three weeks ago. Although it’s early days, Samsung has seen already a firm uptake in the wallet’s usage. While Samsung has deployed magnetic secure transmission (MST) as a bridging technology in other markets (to be able to interface with magnetic stripe readers), this is not necessary in Spain because of the high NFC penetration in the country. In our upcoming report on digital wallets, Aite Group will provide a deeper dive into the mobile payment space.

Financial inclusion and serving the underbanked was another important topic during the conference. As it comes to financial services, estimates are that 2.5 billion people are underbanked, having limited or no access to credit. Companies like Kreditech (active in five markets) and Rupeepower (India) provide a digital platform for credit application and real-time approval to customers who do not have a credit history. Credit-scoring technology using artificial intelligence and machine learning is deployed to make near-real-time scoring and approval possible. This is a great development to provide credit to people who really need it.

According to the organization, 1,855 people from 62 countries attended MoneyConf this year. The event provided great networking opportunities with executives from leading companies as well as an insight into fintech innovation across the globe. We’re looking forward to next year’s program.

 

 

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