IBS Journal April 2017


13


The best of friends


like Temenos, or at least that is what IBS Journal was told at the company’s latest Innovation Jam event in London. The gathering played host to some of the most exciting FinTechs out there. The winners of a series of regional pools (simultaneous events are happening in the US, Asia and Europe) will be showcased at the vendor’s larger Commu- nity Forum.


I


Collaboration was the word of the day and Temenos’ Chief Strategy Officer, Ben Robinson, made the case that Fin- Techs and banks are a match made in heaven. Presenting research conducted with the Economist’s Intelligence Unit, Robinson highlighted how in 2014 52% of US banks consid- ered FinTechs the competition – in 2016 it was 2%. 65% of banks are also interested in collaborating with startups.


Banks have millions of customers and reams of data. On top of that, they have the customer’s trust. “It’s lower than it was before the crisis. But it is still there.” That trust is still much higher than it is for challenger banks.


While that has gotten them so far, they will need to pivot to keep up with a changing financial landscape. Provid- ing transactions is no longer the be-all and end-all, virtual advice should be a target goal for them too. FinTech and technology companies update their platforms multiple times a day, sometimes hundreds of times. A bank Temenos recently spoke to had “updated their platform three times in 25 years”.


If at every level FinTechs were seen as allies, rather than enemies, there would a creation of an “instant fulfilment” platform for customers. Banks can control their traditional distribution channels, data services and models but allow FinTechs to innovate their approach.


The Temenos Marketplace, which now has more than 40 companies hosted on it, is an example of how the two fields can interact. They could, in fact, be the best of friends.


The event’s keynote was presented by David Birch, Director of Innovation at Consult Hyperion, who took blockchain to task by arguing that it’s catch-all nature is fundamentally


nnovation is in the lifeblood of a company


flawed, and no one knows what they’re talking about. Al- most everything you’ll hear about the technology is “utter rubbish”, while blockchain evangelists are like “scientolo- gists” droning at people to “join the cause” and become “one of us”.


The only true case study, Birch argued, was in digital iden- tity. Taking the Ashley Madison hack as an example, he said that if the hackers had broken in and the website had verified users with tokens, all the criminals would have found was a jumble of cryptographic data. Instead, they came across a treasure trove of personal information.


Transactions shouldn’t be based on who you are but what you do. Identity shouldn’t be part of these actions, and should be verified instantly by a trusted third-party like a bank. This will become more of a case when PSD2 arrives, which firms are already “struggling” to create solutions for.


Birch concluded that new systems aren’t just “for the kids”. Integration with systems like biometrics can cre- ate secure, verifiable methods of authorising customers without the need to fill in reams of personal data that can be compromised.


With 16 FinTechs keen to strut their stuff, the show was packed with presentations tackling the likes of financial literacy, KYC, cyber security, lending, gamification and machine learning. Votes were cast by both attending delegates and a panel of judges.


The eventual winners, crowned after a panel on the dis- cussion of digital banking, were Scanovate and Xtrem- ePush. Scanovate focuses on proprietary mobile imaging, and allows banks to revamp their cheque deposits, bill payments, risk and digital registration using its KYC 360 platform. XtremePush, which won the audience vote, uses analytics to drive customer engagement. Both will now head to the Temenos Community Forum in Lisbon, Portugal.


Alex Hamilton


www.ibsintelligence.com


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