1. Wall Street turns on the fintech heat
If 2015 was the year of fintech Star Wars, of the upstart firm taking on the big boys, 2016 could be the Empire Strikes Back.
The largest financial institutions are indeed rising to the occasion, developing new products, striking strategic partnerships, and advancing the ball.
Of global major banks, Spain’s BBVA is one of the most active investors and acquirers in the fintech space. Scarlett Sieber,who is part of the business development team for the bank’s digital business, joins us on the Tradestreaming podcast to discuss how (and why) she is building a financial technology ecosystem.
What happens when the largest credit card issuer partners with the largest gas retailer? JPMorgan’s Chase Pay landed a deal with Shell, giving the upstart digital payments platform access to 20 million daily customers.
Barclays revealed plans that showed serious intentions about banking Africa, bringing potentially 1 billion unbanked folks into the financial fold.
2. Fintech is competitive and, sometimes, destroys value
Wall Street has a lot of work to do – for example, today’s brightest are less likely to want to work at hedge funds. (That’s not deterring Goldman Sachs, though, from rolling out a new video format for on-campus recruiting).
Also, it can’t be easy heading up the largest player in the actively-managed funds space, either. BlackRock’s Larry Fink has a ringside seat, witnessing the outflows of actively managed capital, flowing into passive strategies. Active managers are feeling the pain of watching more productive revenue streams evaporate.
Right now, it seems servicing clients and protecting long term franchises is a good start.
More so than bitcoin or other sexy fintech technologies, video banking is already here and changing the way customers, and banks themselves, interact with financial services. We’re quick to (falsely) compare video banking to a Skype-powered teller, but it’s really so much more.
Video banking is about creating real experiences, putting a human face on digital banking. It’s good for customers and that shows — video banking still has some of the highest conversion metrics of all channels. So, in addition to creating operational efficiencies, video banking also has important security implications. Lastly, video banking technology is also helping some of the underbanked — like people with hearing disabilities — get serviced like other bank customers.
As customers clamor for more from their financial service providers, small players of the big financial game are responding with their own versions of transparency. Transferwise is the horse to beat in the online money changing business with over 600 routes in 35 different currencies. The startup claims it has over a million customers conducting $750 million worth of transfers per month.
But that’s peanuts compared to the $5.3 trillion in forex transacted daily. Transferwise has big aspirations and to get there, the firm launched a new partnership strategy that would bring the company’s currency exchange tools to other online banking platforms. So far, it looks like that strategy is working.
Berkshire Hathaway is known for its lively annual shareholder meetings, featuring everything from a ping-pong match between chairman and CEO Warren Buffett and Microsoft cofounder Bill Gates to discount jewelry shopping. A sign of the times, the firm live streamed its event this year. Communicating with investors has come a long way.
When it first launched its virtual shareholder meeting services in 2009, four companies held such meetings. This year, Broadridge Financial Solutions is expecting to facilitate meetings for 200 public companies, 80% of them virtual-only and 20% hybrid, or a mix of in-person activities and an online broadcast, like Berkshire Hathaway did.