Ambar Vitelli-Khosla
Strategic Partnerships
Exploring the dynamic landscape of fintech and banking, the Money 20/20 USA 2023 conference in Las Vegas served as a catalyst for insightful discussions and revelations. From October 22 to 25, 2023, financial industry leaders and experts delved into wide range of topics that are expected to shape the future of money in the coming years.
Having had the honour to return to this insightful event once again, we’ve compiled out list of top 10 key takeaways that we believe will be critical in steering the course of innovation and growth in the fintech ecosystem.
Key Takeaways from Money 20/20 USA 2023
1.The E-commerce Space Needs to Increase Payment Authorisation Rates
Industry experts emphasised the critical importance of increasing payment authorisation rates within the e-commerce space. Eric Queathem, EVP of Strategy and Growth at Worldpay, pointed out that achieving high authorisation rates in e-commerce is paramount. Every transaction lost translates to revenue businesses are missing out on. To address the challenge, the industry should focus on approving genuine transactions while minimising false positives. The issue is multifaceted and requires a holistic approach.
Queathem also elaborated on the significance of customer experiences. Creating omnichannel experiences, which involves enabling customers to buy online and pick up in-store, has resulted in transformative changes over the last decade. This approach, among other strategies, can help overcome friction in the payment process.
2.Banks and Financial Institutions Must Hyperpersonalise Their Solutions for Each Specific Client
Serena Smith, Chief Client Officer at i2C, spoke about the necessity for banks and financial institutions to tailor solutions to the specific needs of each client. According to Smith, i2C’s approach revolves around a customer-centric mindset, focusing on understanding individual clients and building solutions that align with their unique requirements.
This emphasises the need for hyperpersonalisation. One-size-fits-all solutions, and even personalised offers are no longer sufficient in the dynamic landscape of banking and finance.
3. Compliance Is Key to Advance Digitalisation
Lisa Novier, Head of Governance, Risk & Compliance at Envestnet Yodlee, stressed the critical role of compliance in advancing digitalisation. Organisations should enable consumers to have data portability, a concept embedded in many privacy regulations. Despite technological changes, compliance remains a foundational aspect of financial services. It aligns with privacy regulations and empowers consumers by enabling them to control their data securely.
Novier’s perspective reinforces the idea that, while technology is advancing, there is a parallel need to ensure adherence to compliance standards to build a robust and trustworthy financial ecosystem.
4. Cultural Fit Is Vital for Successful Bank-Fintech Partnerships
Alex Acree of Unit spoke about the significance of cultural fit in fostering successful bank-fintech partnerships. The collaboration between traditional banks and fintechs plays a pivotal role in enhancing financial service, and bridging the gap between these entities requires a shared cultural understanding.
Acree’s perspective highlights the importance of alignment in values, vision, and working styles between banks and fintechs. Successful partnerships are not solely about technological integration. Effective collaboration goes beyond the transactional aspects and needs shared ethos and approach to delivering financial services.
In addition to making the partnership more streamlined and effortless, it also delivers greater value to the end user, better tailored to customers’ needs and expectations.
5. Fintech Companies Must Evolve to Fight Against Continuously Evolving Financial Fraud
The discussions at Money 20/20 USA 2023 brought attention to the evolving landscape of fraud, particularly with the integration of emerging AI technologies. Alex Acree of Unit raised concerns about the changing dynamics and the impact on biometric identification. In a scenario where text-to-speech voiceovers with personal voices become prevalent, there’s a need for fintech companies to evolve in their strategies against sophisticated cyber threats.
The continuous evolution of financial fraud methods, coupled with advancements in technology, poses new challenges for fintech companies. To stay ahead in the fight against fraudsters, these companies need to adopt adaptive and innovative approaches. This includes leveraging advanced technologies like AI and machine learning to detect and prevent fraudulent activities.
6. It’s Essential to Ensure that Established Fintechs Don’t Compromise Sustainable Business Models due to Profitability
Maintaining profitability and sound unit economics is crucial for the long-term success and stability of any fintech enterprise. Focusing on financial health, as emphasised by Dan Schulman, CEO of PayPal, becomes paramount.
As the fintech industry continues to mature. However, striking a balance between innovation, customer-centricity, and financial sustainability is key to ensuring the continued growth and resilience of fintech businesses. The industry should avoid over-reliance on investor liquidity and strive for models that stand the test of time.
7. Experiential Marketing Will Help Create Meaningful Connections with Potential and Existing Customers
In the rapidly evolving landscape of marketing, traditional methods face challenges due to an overwhelming number of messages and interruptions. As per Raja Rajamannar, CMO at Mastercard, consumers encounter an average of 5,000 messages daily, leading to a mere 8-second attention span.
To address this, the significance of experiential marketing can serve as a powerful tool to cut through the noise, delivering personalised and curated experiences. By creating memorable experiences, brands should aim to go beyond traditional advertising, fostering human connections and becoming an underlying enabler in various facets of life.
8. There Is No Greater Value than Financial Equity and Financial Health
Dan Schulman, CEO of PayPal, also emphasised the paramount importance of financial equity and health. These values are not only crucial for the success of individual companies but also for democracy and capitalism as a whole.
For instance, an estimated 4.5% of households in the US which makes up approximately 5.9 million families are unbanked. While the number has shrunk considerably over the past years, this still represents a significant part of the population that could better contribute to the overall economy, especially amidst the gradual transition toward cashless payments.
As a seasoned technology leader, Schulman called attention to the collective responsibility of the payments industry to address unnecessary fees and higher interest rates, thus focusing on achieving financial health for all. He stressed that by implementing cheaper transactions, driving volume, and not increasing costs, companies can make a positive difference.
9. The Payments Industry Must Re-examine How It Engages with Verticals Traditionally Considered High-Risk
During the discussion on “Regulatory Trends: Crypto, Cannabis Banking, and Gaming”, industry experts highlighted the strong consumer interest and adoption across cannabis, digital assets, and gaming in recent years.
The session emphasised the impacts of conflicting policies at the federal and state levels, forecasting potential changes in the short and long-term regulatory landscape. Attendees were prompted to consider how merchants, financial institutions, and processors should approach these high-risk verticals and pose critical questions before entering and engaging in such markets.
Moreover, as the regulatory landscape in the high-risk vertical shifts, it’s crucial to also consider new risks, threats, and customer behaviours. Testing products, and features in a safe environment can help fintechs and payment solutions providers protect sensitive customer and company data.
10. Family-Based Banking Must Evolve
Amdocs, a vendor highlighted during the conference, showcased innovative initiatives challenging traditional notions of an “account” in family-based banking. This concept goes beyond merely catering to children’s banking needs. It reimagines the entire structure of banking relationships within a family.
As a result, the financial industry should explore novel approaches to redefine and enhance the banking experience, as traditional models might not adequately meet the diverse and evolving needs of modern families, making it much harder to retain and attract customers across different ages and demographics.
Final Words
Money 20/20 USA 2023 conference provided a panoramic view of the transformative trends and challenges in the fintech and banking realms. As financial leaders and innovators continue to navigate this ever-changing landscape, these key takeaways will guide the industry toward resilience, inclusivity, and a future where finance meets the diverse needs of customers.
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