Barclays the blockbuster of finance, insurtech innovation, how to compete with fintech, the real number of unicorns — FinTech Summary 82

Fintech won’t challenge us. Jess Staley, CEO of Barclays, sees technology as driving globalisation and changing banking, but says there’ll always be a Barclays.

It’s also worth understanding that there is no upside to saying stuff like this. Because more often than not, you’ll find yourself on the wrong side of history like so many of these CEOs. And then we’ll make slides to immortalise your cluelessness — “neither Redbox nor Netflix are even on the radar screen in terms of competition” once said Blockbuster CEO…

Thanks for reading; YOU are awesome!

What’s happening in the Insurtech innovation scene in London
By Bernard Lunn

Insurtech is moving beyond the early buzz created around P2P, drones, Blockchain and AI as concepts. The focus now is on solving actual pain points that the incumbent insurance industry fully recognises, the most pressing of which is how to better engage with customers. There is less hostile talk of disruption and more about the power of partnerships. The backdrop to all of this is the collapsing value chain in Insurance.

How banks can compete against an army of fintech startups
By Karen Mills and Brayden McCarthy

It’s been more than 25 years since Bill Gates dismissed retail banks as “dinosaurs,” but the statement may be as true today as it was then. Banking for small and medium-sized enterprises (SMEs) has been astonishingly unaffected by the rise of the Internet. Gates’ original quote contended that the dinosaurs can be ”bypassed.” If U.S. banks are going to survive the coming wave in financial technology (fintech), they’ll need to finally take digital transformation seriously. There are strategies that they can use to compete successfully online. The familiar David vs. Goliath script of the scrappy, internet-fueled startup vanquishing the clunky, brick-and-mortar-laden incumbent is repeated so often in startup circles that it is sometimes treated as inevitable. But in the real world, sometimes David wins, other times Goliath wins, and sometimes the right solution involves a combination of both. SME lending can remain a big business for banks, but only with deliberate choices about where to play and how to win. Banks must focus on areas where they can build a distinct competitive advantage, and find ways to partner with or learn from the new innovators.

Disruption is already here
By JP Nicols

Disruption is already here. It just isn’t widely distributed yet, as William Gibson famously said about the future.The open banking movement may eventually turn banks into app stores, where customers can consume products and services from a wide range of providers, all connected to a central banking utility. This platformification of banking, as Ron Shevlin calls it, is still very much a work in progress, but leading banks, such as BBVA, Capital One, Silicon Valley Bank, and others are actively developing APIs and working with fintech partners to connect and build new applications for customers. The result will be a massive reduction in operating expenses, and the ability to mass-customise products, features, and benefits to personalise the experience for banking customers. Exactly what most banks need, but you have to play to be able to win.

Fintech unicorns — what’s the real number?
By Chris Skinner

Investors are accustomed to the modern tech growth curve. Most funds have a three to five-year investment horizon. This means that investors inject capital into a business with the expectation of realising a return on that capital within that investment horizon. The problem is that finance is a very slow-moving sector. Whether you’re selling bank technology, small-business solutions, or acting as a lender, it takes time to break into the market. The tech idea that you must get big fast and dominate a sector is at odds with the slow-moving nature of finance, and lending in particular. Unfortunately, fintech companies often receive pressure from both existing and potential investors to demonstrate so-called “hockey stick” growth. This, in turn, leads to short-term thinking on behalf of the fintech company, which brings us to the second reason for the industry’s woes.

Originally published at FinTech Summary.