08
NEWS
the FinTech side of its cloud business and we’re part of that initial wave.” Amazon has also been helping the firm out a lot on the ground, in conversations with clients and regula- tors.
On Mambu’s global reach, Danilkis stated that the com- pany tends to operate on a case-by-case basis without specifically focusing on one region. Following its launch, there have been so many inbound requests for projects that it hasn’t had the time to really search out its own opportuni- ties. “Our brand and global reputation has been reflected in the deals that are coming in.”
Human nature
Large FIs are struggling with the pace of change in an era of transformative technology, according to Antony Jenkins, Founder of 10x Future Technologies and former Barclays CEO.
“Why hasn’t technology changed banking? I asked myself that question at Barclays,” Jenkins said during a panel discussion at Lendit USA. “The problem [10x] is trying to solve is not that there aren’t smart, committed people in banks but that it’s very difficult for incumbents to transform themselves.”
The issue is both mechanical and cultural. The legacy banks are used to doing things in a certain way, and it is human nature to resist change. “It’s very rare in most industries to find incumbents who drive the next wave [of change].” Banks, he added, are weighed down by their technology and faced with huge costs just “to keep the lights on”, as well as a numbing in terms of regulatory changes thrown their way.
Jenkins, prompted by session moderator Brett King, Found- er of Moven, had some praise for the developing economies of the world and their financial heavyweights. WeChat and TenCent have done “a fantastic job” in China. “There are lessons to be learned from the developing world,” but there are still possibilities due to infrastructure inefficiencies.
10x Future Technologies was designed with both the bank and the customer in mind, “Take out your phone and look
at the two or three apps that you love,” said Jenkins. “Is your banking app among them? We think it should be.”
Big Data
The challenge of expanding consumer finance to China’s vast population can only be effectively tack- led with a high-tech solution that enables low-cost customer acquisition. That’s according to Dr. Zhengyu (Zane) Wang, Founder, Chairman and CEO, China Rapid Finance, whose lending platform taps predictive selec- tion technology to acquire customers (the company had facilitated more than 10 million loans as of 31st December).
Over the past two decades, China has emerged from be- ing a market that in 2000 featured essentially no credit bureau, decision science, or consumer finance, Dr. Wang said in a keynote address at LendIt USA. China’s consumer finance market today boasts many of the same elements as the US. The country now has a central bureau for credit reporting that covers 800 million peo- ple, while credit cards serve about 300 million people. Its consumer finance market has, however, a long way to go, in a nation where non-mortgage credit is only 2% of GDP, Dr. Wang told the LendIt audience. Only about 16% of Chinese consumers have credit cards, compared with about 60% in the US.
Some 500 million people still have no access to consum- er credit, despite having quality jobs, and rising discre- tionary spending. This group is characterised by people who are typically 18-29 years old, well-educated, urban, and avid smartphone users. Licenced FIs have gener- ally not served them for a variety of reasons, including the strict regulation of lending rates, and the high cost to collect data from such a large group. Serving this group effectively demands Big Data analytics, Dr. Wang argued.
Blockchain
If consumers and banks had a choice they would com- pletely disassemble and recreate the banking industry, with blockchain as a foundational part, according to
www.ibsintelligence.com © IBS Intelligence 2017
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