I am interested in FinTech because Banking has been an area in need of better solutions for a long time.
So naturally, I was interested when this month the Product Meetup curated several talks from product managers from FinTech companies.
In this post I will provide a summary of the main points which got my attention from the different speakers. I hope this could be helpful for people considering going into this sector or managing FinTech products.
There were three talks:
First Talk: “Marketplace Banking and the “Uberisation” of Financial Services
The first speaker was Tracy Abraham who was working in Mondo in the past. She pointed the image below that shows how specialised banking is becoming.
Finch startups are focusing in solving very specific problems and doing it very well. The image shows the name of the European FinTech companies and how they position around the different offers of a traditional bank.
FinTech startups are building their products with their customers, for example Tandem Bank, encourages everyday people to engage in the design of the banking experience.
Banking apps, such as TD MySpend that track everyday expenses and help users to avoid overspending, have seen great demand in Canada.
An interesting observation is that for startups based on applications, their product is the brand.
They need to be able to quickly iterate their product and provide a great experience to the users.
Technology can also be used to provide transparency, like Funding Circle which provides loans to businesses offered by normal people. All the information regarding the payments and financial situation of the borrowers is available in their platform so that lenders can make informed decisions.
Second Talk: “The block chain — opportunities and challenges”
The second talk was given by Lars Kruger, the Head of Product at Blockchain.
Initially Lars explained that a blockchain is like a big spreadsheet in the cloud, where all the payment transactions are recorded.
Currently the Blockchain is 60Gb in size and can be downloaded by every participant of the network. Since the spreadsheet is shared by everyone it is possible to control its integrity with some sophisticated protocols.
Bitcoin is an application on top of the Blockchain and it is a trusted ledger (like the spreadsheet) and a payment network.
Bitcoin is used as a digital currency, and a Bitcoin wallet is similar to an email client where you can send money to users as easily as sending an email message.
With Bitcoin, one can be our own bank, meaning that, you can hold your Bitcoins in a trusted wallet, like you hold your email in a Google Account.
The main problem that was highlighted was that users can forget the password of their account and lose their money. For this, a centralised credentials system might be the solution. One can also print on a paper a sequence of words that could help you recover your money.
In the second session of the talk, other application of the Blockchain technology were mentioned.
Blockchain can be used for managing rights, for example, an asset tracking application can help tracking the ownership of an asset and transferring it to different users.
Blockchain could also be used to implement ‘smart contracts’ where several payment scenarios can be performed in the future depending on given market conditions.
To know more about the applications that could be enabled by the Blockchain follow this link.
Third Talk: “Fintech & Shotguns”
Finally, Scott Eblen, who was until recently Chief Product Officer at Nutmeg, shared 3 key lessons about product development from FinTech.
He introduced his talk by referring to the way shotgun manufacturing had ben revolutionised.
In that industry, the new approach came from a completely unrelated field with a new way of doing things. This is case of how internet technology can change the banking industry.
1. Ignore industry traditions: For investment products for long term objectives (pension, etc), how many times the users viewed their portfolios correlated to high user churn. In this particular case, it is preferable if the user don’t visit their account regularly as this means he is happy with his decision. Another similar example, was the mobile first strategy. A research showed that investors using mobile interfaces did worse decisions than investors on the similar desktop application. Hence, for some products, a desktop application is preferable.
2. The language used to present a product influences the investor decision. It was mentioned that people feel 2.5 times more deeply their loses than their winnings. So introducing the same investment opportunity with terminology about losing would discourage more users than if the same opportunity were presented with terminology about winning.
3. Regulation can become competitive advantage. Nutmeg was able to get FCA approval to carry out regulated financial advice. This was a long process, however, the difficulty of the process meant that it was difficult for other competitors to catch up quickly on it.
To summarise, the event:
- Provided a closer view to some of the most well known FinTech startups in London.
- Gave a good introduction to Bitcoin, Blockchain and its future possibilities.
- Provided insight into specific product design differences in financial products.
If you usually attend other regular FinTech events in London or San Francisco, please share the in the comments!