Money 20/20 Europe in Review
Last month, Wharton FinTech attended the first-ever Money 20/20 Europe conference in Copenhagen, Denmark. Bringing together nearly 4,000 participants, this was the largest European-centric FinTech conference to date. The 4-day conference covered a broad range of topics from payments to alternative lending to the blockchain. We identified 3 recurring themes: collaboration between traditional financial institutions and innovative FinTech startups, trust, and the future of cash.
Collaboration
Panelists and speakers emphasized that collaboration between traditional financial services players and innovative newcomers will be essential going forward. Today, customers expect speed and quality — but incumbent banks may have difficulties meeting these expectations due to branch-based service models and legacy technology systems. Nevertheless, banks have millions of customers and the funding to spend — therefore, a partnership could be mutually beneficial for both parties.
During a VC panel on strategic vs. financial investment, one of the panelists discussed how FinTech startups and banks can successfully collaborate. The startups have disruptive ideas and agility, while the banks have the brand, funding, and customers. To the panelist, this doesn’t present a conflict, but rather a “build vs. buy” dilemma. Startups can innovate faster — therefore, by partnering with or investing in startups, banks can harness this ability to their advantage. Startups, on the other hand, will partner with banks as they see the advantage of scale.
Trust
In financial services, the issue of trust is an important one. Trust was eroded during the financial crisis, and therefore trust and transparency will be key to the future success of players in this industry — especially in payments.
During a panel discussion with Kristo Käärmann, co-founder of TransferWise, Kristo touched upon this exact issue. Before the TransferWise launch, he wasn’t sure people would trust his product. It is was only by launching that he realized people will trust a well-executed, licensed, and regulated product. He stated that people have become more trusting of technology companies over time. Apple didn’t give in to the US government and — in general — consumers view technology companies as more trustworthy than traditional financial institutions.
The Future of Cash
For a conference set in a country that is considered one of the biggest non-cash users in Europe, the future of cash was a natural discussion topic. While some differing ideas were presented, most who spoke about this topic recognized that cash is here to stay for the foreseeable future. Ann Cairns — President of International Markets for MasterCard — stated that 85% of retail payments around the world are still done in cash, and that percentage isn’t declining in a meaningful way. Even if it were to decline, Ann believes that it is important for people to have a choice and to use the instruments they believe to be the most convenient and safe.
We would like to thank the Money 20/20 Europe organizers for inviting us to the conference. We thoroughly enjoyed our visit, and we look forward to seeing you again next year!
