‘If you don’t offer an experience you’re not relevant’: Why banks need to be at SXSW
- SXSW offers banks opportunities for marketing, networking and above all, engagement with customers that they're missing
- Banks' SXSW absence shows financial services innovation isn't as far along as it seems at more industry-focused events like Money 2020 or Finovate
This weekend at Antone’s Nightclub in Austin, Capital One executives donning jeans and zip-up hoodies were scattered across the ground floor demoing the bank’s innovations in augmented reality, while upstairs, some of their colleagues took SXSW audience questions in a full house. The line outside for the next event snaked around the block.
It’s clear that financial services has come a long way in the past three years.
The conference circuit alone is evidence of its growth. Money20/20, once a payments focused conference, welcomed 11,000 attendees at the last U.S. event and now covers all manner of fintech. Finovate, a much smaller event that began as a giant pitch session for startups, added two days of speaker content to its last event in New York. But you’d be hard-pressed to find any financial brands at SXSW (other than Capital One, which has been a “super sponsor” of the Austin conference and festival since 2016).
Much like the industry itself — even in its own silo — the financial technology excitement at SXSW is around young startups. And banks are throwing their weight behind those. USAA was the “presenting sponsor” of the SXSW Hackathon on March 13; there are many fintech startups in town presenting at the SXSW Trade Show and a handful of fintech related panels over the course of the week; Pefin, the artificial intelligence financial adviser where former BNP Paribas executive Catherine Flax is CEO, was named a finalist in the SXSW Interactive Innovation Awards.
“I’d like to see more centralization around fintech,” said Leah Romanoff, the fintech lead for S&P Global, the centuries-old legacy fintech firm that announced largest AI deal ever last week, its $550 million acquisition of Kensho. “Fintech isn’t its own track. It’d be nice to get more granular.”
Onlookers agree that banks should have a bigger presence. They miss big opportunities for marketing, networking and above all, engagement with customers, especially millennials. Financial services companies are increasingly differentiating themselves with experiences instead of product pricing — Citi and TD Bank have created pop-up ATM gifting machines, for example. But SXSW is a mecca for experiential marketing, and financial brands are waking up to the fact that competition is no longer just the other bank, but instead the customer experience provided by other brands and setting experience expectations for financial services customers.
“People are shopping online. They’re going to places only for experience, and if you don’t offer an experience, you’re not a relevant brand,” said Joy Schoffler, chief strategy officer for Casoro Capital.
Capital One House, for example, takes over Antone’s Nightclub for daily talks, workshops, demos, happy hours and music showcases in the evenings. It also ran a #GoSwagless campaign, in which they invited attendees to vote for one of three nonprofits that the bank will redirect funds to for the usual event swag.
“There are a lot of people with a big influence and following here at SX,” Schoffler said. “This is also a chance for big brands to identify themselves as innovators in front of a large audience. They have to be seen as innovative. They have to be seen as relevant and interesting.”
It doesn’t even cross banks’ minds though, she said. Banks talk about their need to tear down their silos — “we don’t actually have any silos,” one banker claimed this weekend — but the should-be-changing mentality hasn’t affected the way they choose event presence, and many still opt enthusiastically for “traditional” banking conferences, like BAI.
“You tend to operate in your industry silo, but there’s so much you can learn at events like this from super impressive innovators,” said Schoffler, an active leader within the fintech community who sits on the board for the SXSW Accelerator and used to help manage public relations for the Finovate conferences. Her background also includes board positions at major regulatory advocacy organizations.
“It doesn’t even cross their mind when they’re looking at their marketing spend,” she said. “It doesn’t compute as ‘I need to be there’ yet.”
Their glaring absence just shows that despite their suddenly fast turnaround — they’re still as large and slow as aircraft carriers at the end of the day, despite their shift from being product-centric to customer-centric — financial services innovation is still new and perhaps even a bit confused, Flax suggested.
Fintech 1.0 was about the automation of everything, she added. The companies looking beyond that, those participating in SXSW, are planning to change how people interact with their finances, which should be about more than just automation.
“SXSW is really focused on what’s transformational, what’s changing the way in which people do things,” said Flax, a 20-year banking veteran with senior leadership roles at Morgan Stanley, UBS, JPMorgan — where she was a chief marketing officer — and most recently, BNP Paribas.
“Financial services is still in it’s nascency in that,” she said. “There’s not much fintech here because there’s not much that’s really transforming the way people interact with their money or make financial decisions.”