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European and American Tech Experts Debate the Future of Finance

Lauren Ruef

Business consultancy firm Capgemini released their World Fintech Report 2018 in partnership with LinkedIn and Efma and instead of letting it slip quietly into the archives of the Internet, brought the conversation to life by hosting a livestream theater-in-the-round of sorts for global fintech interests.

The gameshow is a beloved fixture of pop-culture trivia, but as a forum for cross-cultural conversations on finance—it’s somewhat of a new format.

recap from 2018 world fintech report

CBS Business News Analyst Jill Schlesinger moderator for the stateside panel disclosed the format of “Fintech Face-off 2018” as a “high-stakes chess match meets frenetic game show” composed of a banking industry incumbents and its respective fintech challengers.

Two continental teams—Team Europe and Team America—sounded off on topics like digital identity, customer trust, and collaboration models between fintechs and incumbents like banks, held brief, suspenseful exchanges before a live digital audience. Live viewers cast their votes through social media for the winning side of each round.

If you don’t have an extra two hours to spare to entertain the conversation from its many angles, here’s a recap of quotes from thought leaders in the space:

ROUND ONE

Question: Which are the most overhyped and underwhelming emerging technologies in Financial Services today? What tech actually has the most realistic chance of redefining the banking experience?

🇺🇸 TEAM AMERICA:

“The most hyped technology is AI and the most promising technology is AI (...) We have to stop making this conversation about who is smarter—myself or the machine—and start talking about how we make ourselves better at what we do using the technology that is available.”

—Jeff McMillian, Chief Analytics Officer, Morgan Stanley

🇬🇧 TEAM EUROPE:

“The most overhyped technology is obvious. Blockchain, in its fifth or sixth year, is like hammer looking for a nail ...so I would look at from a banking perspective, blockchain as is, is extremely overhyped. It’s likely to come back in a different way, but it’s meant for a decentralized banking system, not for a centralized regulated banking system.”

Suresh Ramamurthi, Chairman CBW Bank

🇺🇸 TEAM AMERICA:

“The second most powerful thing you have in your organization is not a piece of technology, it’s leadership and its culture. We spend so much time talking about the next new cool widget that’s coming down the line that’s gonna take us to the next century, and the reality is, the reason you will fail has nothing to do with the fact that there’s not a vendor solution in the marketplace to solve your problem. The reason you will fail is because you could not align your business objectives and your organizational structure to embrace these new technologies in a way that will actually grow your business...”

—Jeff McMillian, Chief Analytics Officer, Morgan Stanley

And the winner of Round one is…...Team America!

ROUND TWO

Question: How are companies leveraging data to understand customer needs, improve trust and drive engagement and loyalty?

🇬🇧 TEAM EUROPE:

“Data is the underlying asset that will make change and redefine the banking experience of the future. The ability of the organization to have a highly personalized experience to deliver to the customer is a trend we are seeing clearly in the industry. It’s not about digital identity, it’s not about blockchain, it’s not about AI, it’s not about chatbots, it’s about the customer and data.”

—Claire Calmejane,Transformation Director, Lloyd Banking Group

🇺🇸 TEAM AMERICA:

Sam Maule, Managing Partner at 11:FS chose the words of Bill Gates as his closing argument to the conversation:

“We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next 10. Don’t let yourself be lulled into inaction.”

And the winner of Round Two is…...Team America!

ROUND THREE

Question: How can banks meet rising expectations, while saddled with legacy systems? Are APIs and Open Banking the final answer or simply a stop-gap solution?

🇺🇸 TEAM AMERICA:

After listing top three debts inside of legacy firms as process, organizational/culture, and technical, Hartman added:

“We like to focus on technical debt. CEOs and CFOs look at that line item and say, ‘Hey What if I cut a third of that out’ Look at all of the things I would save through automation.’ But if you don’t tackle the first two, automation will only get you so far.”

—Boe Hartman, CIO GS Bank

🇬🇧 TEAM EUROPE:

“One of the issues in banking is settlement and reconciliation. And it’s not talked about much but it’s the single biggest headache in banking. You could spend a thousand dollars chasing a dollar in a discrepancy. We need to figure out how to do real-time settlement and reconciliation across all kinds of products.”

—Suresh Ramamurthi, Chairman CBW Bank

🇬🇧 TEAM EUROPE:

In reference to incumbent banks and other holdouts in on embracing automation, Simon Vans-Colina, Senior Engineer of MONZO said this:

“It’s not good enough to say ‘We’re a company that’s managing down our legacy, that’s managing down our [technical] debt.’”

🇺🇸 TEAM AMERICA:

With team America echoing the sentiment, Executive VP of Banking and Capital Markets at Capgemini Sankar Krishnan made this salient point:

“Legacy comes in the way of smart ideas.”

And the winner of Round Three is…...Team Europe!

ROUND FOUR

Question: What does the future hold for blockchain in financial services?

🇺🇸 TEAM AMERICA:

Jane Barratt CEO and Cofounder Goldbean held a strong lead-off with her opening statement:

“Anyone who's been in fintech space for awhile, you know to beware of the prophets. I’ve been in technology since the nineties, every year is the year of something. It’s year of search. It’s the year of social. It’s the year of mobile. It's the year of ecommerce and everything is going to change. But technology is additive.”

Barratt posed a two-part challenge to the proverbial fintech “prophets” suggesting blockchain’s minimal current uses and naming conventions were out of touch with a consumer market, saying:

“If you were able to decouple cryptocurrency from blockchain, isn’t all we have a database innovation?”

[...]

“What is the blockchain application that the humans of the world can get? Distributed ledger? Can we get better words, please?”

🇬🇧 TEAM EUROPE:

CEO of Startup Bootcamp Nektarios Liolios with the rebuttal:

“Give it time to breathe.” he says, indicating that blockchain’s prescribed uses for the consumer market have not been fully unearthed.

“So it is frustrating,” he admits to the time lag, before he continues:

“At the same time, [blockchain] does something that nobody really addresses which has the potential to change the relationship and ownership we have on data ...The debate is all about ‘Show us the money’ and maybe not yet, but give us some time.”

Simon Taylor held the audience captive with one of the more poignant moments of the debate, addressing an earlier critique of USA’s Barratt that blockchain had no “human” uses. He argued that one day blockchain might be the very thing to expose societal ills like human trafficking through greater supply chain transparency and corporate social responsibility:

“People are manufacturing goods and services and are not being paid for it. The problem with modern slavery is that it’s very hard to prove what’s happening and where goods come from. Large retailers do not know where their goods come from. Even though throughout the process there is certification and completely well-known paper trails throughout the process. How about preventing all kinds of horrors around the world. I think new technology can do amazing things, and blockchain is just getting started.”

And the winner of Round Four is…...Team Europe!

Watch the rest of the debate to find out the tiebreaker or download the World Fintech Report 2018 to get more details on collaborative relationships banks are building with fintechs.

 

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