IBS Journal December 2016


27


threw huge amounts of cash at their digital offerings and snapped up emerging competitors.


Which leads us neatly onto… …Evolution, not revolution


The FinTech revolution morphed into an evolution this year. Banking technology continued to evolve on multiple fronts, from use of selfies in customer authentication, to Open API developments and ‘platform’ thinking, to edging the world along the path to an interconnected distributed ledger technology- enabled ‘utopia’.


“While the world of FinTech has undoubtedly helped drive innovation forward across large incumbents and new startups alike, as a banking customer and consumer of various financial services, it all feels very much like natural evolution rather than revolution, despite what many of the new banking digerati might have us believe,” says Simon Barrows, Architecture, Data and Transformation Consultant. “2016, though, has seen a number of banks begin to trial and roll- out a variety of artificial intelligence solutions. Step forward the likes of Amelia, Erica, Nina and Luvo, which although limited in scope thus far have already begun to demonstrate the enormous potential.”


The customer is always right (oh no they’re not!)


“You’ve got to start with the customer experience and work back toward the technology, not the other way around.” So said Steve Jobs. Few people better understood the importance of the customer experience than Jobs. Sadly, many in the FinTech world (particularly in the payments area) put the product first, not the person buying it.


Too often this year, we’ve seen companies touting tech that solves a non-existent problem, whilst high fiving eachother at cool conferences and exchanging smug ‘you’re awesome, no, you’re awesome’ pleasantries on Twitter. As Guy Shone, CEO, Explain the Market, put it: “Something is wrong when 20 million potential customers carry on as they were, while we meet in conference venues and high-end coffee shops to agree how revolutionary we are. As a FinTech community we need to listen to the public without finishing their


sentences. We need to understand the views and preferences of those unimpressed by our rhetoric, who do not want to join our exclusive club. We need to test whether a diverse range of customers actually agree that our work is as important as we say it is. In 2017 it is time FinTech moves out of its comfort zone. Surviving on support from Shoreditch when customers in Stevenage and Salford are ignored is not sustainable.”


Mobile payments still not mainstream


If you believe the banks, card schemes and the many others with a vested interest in pushing mobile payments, we’re in the midst of a period of unprecedented change, consumer adoption of contactless continues apace, yada yada yada. The reality, however, is that mobile is most likely to take off in developing countries where the majority of the population don’t have bank accounts or easy access to physical branches.


By way of example, Apple Pay. The service had a record fourth quarter, said Apple CEO Tim Cook on the company’s earnings call during October. Users completed more transactions in the month of September than the entire year of 2015, he claimed. Transaction volume was up 500% in the fourth quarter, compared to the


same period in 2015. Alas, no mention of the number of Apple Pay users, revenue from the service, or what dollar amount the transaction volume grew to over that quarter. Without this, it’s impossible to know whether 500% is significant or just PR puff.


Elsewhere, security concerns loom large, although customer experience is also key. Mobile payments need to deliver more than just mobile payments. What does Apple Pay offer that cards and cash don’t? For it to take flight, it needs to be part of an overall mobile wallet, including loyalty cards, retailer offers etc.


To quote Michael Abbott, Managing Director of Accenture Digital, Financial Services, North America


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