Even before the word ‘Fintech’ became popularised, technology has always played a key role in the financial sector. From the invention of credit cards and ATMs in the 1950-60s to the eletronisation of financial trading in the 1970s, we have seen a significant evolution in the way financial services are delivered. And the momentum of fintech disruption is showing no signs of slowing down – in the last few years, we see a proliferation of new fintech propositions such as cryptocurrency, payment solutions, mobile banking just to list a few. With the gargantuan amount of VC funding being poured into fintech startups and C-level executives of incumbent financial institutions predicting even more opportunities for fintech innovation in the next 5-10 years, one would naturally wonder if all the mainstream hype surrounding ‘Fintech’ will ever come to pass?
It is easy to associate ‘Fintech’ with mobile banking apps possessing sleek user interfaces and executing financial transactional activities with a few clicks of a button. However, the world of Fintech is diverse and extends beyond mobile banking or payment solutions. Often what is not featured in mainstream media are B2B technology vendors partnering with incumbent financial institutions to enhance the efficiency of their operations. The leading global fintech platform Fintech Circle has even published a book series on ‘LegalTech’, ‘RegTech’, ‘WealthTech’, ‘AITech’, encapsulating the different verticals within the umbrella ‘FinTech’ industry.
The notion ‘Technology for technology’s sake is meaningless’ is the first step to better understand the world of fintech – Ultimately the common denominator across all Fintech verticals is ‘unlocking trapped value’. Whether it is removing the pain-points of a financial customer journey to perform their banking activities, or enhancing the efficiency of backend processes of financial institutions, in most cases Fintech do not create value by inventing revolutionary technologies, they use existing technologies to unlock value that was previously not accessible by the customer due to frictions in the financial ecosystem and infrastructures.
Last but not least, it is prime time to discuss integrating ethics into the business models of Fintech companies, in particular for B2C Fintech companies. Robinhood selling customer trade data to hedge funds and banning the trade of GameStop while marketing their motto ‘investing for everyone’, CoAssets leaving behind a group of hapless investors as the company used these investors’ money to invest in high-risk companies with little chance of loan recovery, these are merely a few examples that demonstrate the potential detriment to financial consumers if Fintech companies pursue aggressive growth and profitability at the expense of any ethics consideration. Underlying the financial system is trust, and any finance companies (not just Fintech companies) should not treat ethics consideration as a PR stunt for brand building, they should instead align profit-generating activities with the well-being of customers. Any company that is able to do so will have a sustainable revenue stream and a significant competitive advantage.
This conference aims to address common challenges faced by Fintech startups in their early stages such as technology scalability, product market fit, branding and user acquisitions. However, beyond the practical element, our conference will explore integrated topics such as how governments can play a role in supporting the growth of the fintech industry and how fintech startups should integrate ethics into their business model. I look forward to hosting you in this truly ambitious LFC 2021: Startup Edition on the 24 Feb 2021.
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