#BeyondFintech with Spiros Margaris: Are fintech’s best days behind it?

Recently, it was a huge privilege to be able to welcome a major fintech influencer to the Fintech & Payments Club when Spiros Margaris joined us for a Clubhouse discussion.

Spiros is a venture capitalist, futurist, keynote speaker and senior advisor who has achieved “The Triple Crown” ranking of No.1 international FinTech, Blockchain and Artificial Intelligence (AI) influencer with Onalytica. I was joined in this discussion about how fintech has developed and where it is going in the future by my co-moderator Darren Franks, the Founder & CEO of TalentintheCloud.

If you weren’t able to join the conversation, here are the main topics we covered and the key learnings I took from it.

There’s much more to come from fintech

So far, fintech has picked all the low hanging fruit in terms of innovation that incumbents should have really done themselves. That is not to say that fintech companies haven’t broken new ground or achieved important things but more that we are still at the beginning of what can be achieved. 

The most progress has been made in improving the customer experience across banking, payments and financial services in general. Fintech shook up the industry by providing opportunities to the masses that had previously been reserved for the privileged few. All of a sudden, services like sending money to relatives cheaply were opened up to ordinary people.

The fact that fintech has progressed so much can be seen in how little fanfare comes with the announcement of a new challenger bank or robo advisor. This doesn’t mean that fintech will not have any more ‘TikTok’ moments, where something unexpectedly huge appears from nowhere. These will come and the key will be cooking up the right blend of technologies to provide customers with what they want.

Embedded finance will win the fintech wars

In all likelihood, it will be a company that isn’t an established provider of financial services that will win the fintech wars and they will do so by using embedded finance to offer services that satisfy customer needs.

Identifying exactly who that will be is hard. Without doubt, the tech giants and the biggest mobile network operators will take some of the market from the banks, who will likely be the biggest losers in whatever new market structure emerges. Banks will be less visible and less powerful but they will still provide the pipes behind the scenes. 

Unfortunately, this will mean many thousands of jobs are lost in banking and it will not be the career choice that young people aspire to, as they have for many years. The big banks know this too and are aware that many other players, including fintechs, are in the driving seat now.

Essentially, this major change boils down to the fact that people will care less and less where their finance comes from. Like with an iphone, where you don’t understand the complexity in the computer but you do understand that it gives you what you need, the same will happen with mortgages, loans and other financial services. 

Banks must be brave to not lose out

Fundamentally, banks must be courageous in their approach and be ready to cannibalise their own business. The faster they do, the faster they will win. In fact, if they had done this earlier in certain areas, there would have been no space for fintech to move into.

Having courage to fail is important. Some banks are too scared to progress in this way because they do not want to bet the bank on these initiatives. However, they must at least be ready and willing to try and possibly fail. 

Goldman Sachs is an example of a bank that is being brave right now by building its Banking as a Service offer. It’s a slightly unique case because it is starting from scratch but there are still many opportunities in Banking as a Service and Embedded Finance which other banks are failing to seize. 

Just getting started can have a major impact and the future may look very scary for them if they don’t. Just look at how much progress Shopify or Grab have made recently. Two years ago, they were nowhere in financial services but now it is bigger for Grab than delivery and restaurants.  

Regulators will always have a big part to play

Regulation should always focus on protecting the consumer but, if you overregulate, you may kill fintech innovation. 

Failure happens but, as the Singaporean regulators have said in the past, you have to have room for failure. A clear example of where regulators have helped fintech is the UK, which has developed into a great hub because it allowed startups to flourish. If you overregulate, these companies just move elsewhere. 

China is an interesting case study for regulation. Right now, they seem to be saying that there has been enough financial services innovation for now and that what has happened so far needs time to be digested. This seems like it might be a dangerous move. 

If the regulators take away the innovation powers of people like Jack Ma from Alibaba it seems inevitable that the industry won’t advance in the future as it has up to now. We’ll just have to wait and see if China proves this wrong though. 

Trust matters but so do great services

You can’t grow if you don’t have a brand that people can connect to emotionally. That’s because branding is all about trust and credibility rather than advertising and marketing. Furthermore, trust really boils down to providing great services that consumers need.

If you think of a company like Amazon, many people might be able to identify some ethical issue they have about privacy or workers rights. However, the same people will still buy from Amazon because it is providing a great service and they simply don’t care enough about the other things. The solution the company provides is the main thing and, with the finance of the future, this will be all about who can supply the loan or other product that fulfills the consumer’s dream.

When it comes to how this plays out with Gen Z consumers, it seems highly likely that a fintech rather than a traditional bank will serve their needs best. The big banks may follow but they simply aren’t agile enough to take advantage right now. 

Want to follow more discussions like those?

1.Visit the Fintech & Payments club website to be informed of daily events. The Fintech & Payments club comprises 30,000 members and followers on Clubhouse, growing every day. We run events every day on a variety of Fintech topics!

2. Follow me on Linkedin for new updates and live session write-ups.

3. Subscribe to my substack to follow my new series Beyond Fintech, exploring how Brands leverage Fintech to unlock new growth opportunities.

🌎 Fintech Career Clinic Series – Episode 1

A series focused on helping you navigate a career in Fintech and Payments.

Advice on how to land a new role, how to develop your career and how to encourage more people into the sector.

EVENT LINK: https://www.clubhouse.com/join/fintechpayments/8ljB2yoT/PA0B1yAA

🌉 Closing the gender pay gap in Fintech

▶️ Join us to discuss how Fintech’s can take steps to identify and better understand how to attract, develop and retain female talent in order to narrow the gender pay gap. This week, we talk with Stacey, Kamogelo, Anneri from TalentintheCloud

👋Join us on Clubhouse

🐦 Join us on Twitter Spaces

🎟 Need an invite for Clubhouse? We’ve got a 1,000!

❓Q&A + live polls via
http://Sli.do using event ID #FPCH3

💬 Chat live with those in the room and get email notifications

✳️ Darren Franks (@Franksy) & James Sherwin-Smith (@26Left)

💰 From the Fintech & Payments Club: 34,000 members and followers, growing every day – and now a TOP40 club on Clubhouse, ranked by members.

🌍 http://FintechAndPayments.Club

#BeyondFintech: How Technology is Leading a Purpose-driven Business Revolution

By Sophie Guibaud, Chief Growth Officer at OpenPayd ✨ BAAS & Embedded Finance

In the latest #BeyondFintech discussion for the Fintech and Payments Club on Clubhouse, I was able to speak to two great thought leaders about the topic of purpose-driven businesses and how this important trend is affecting banking and finance.

Theodora and Brad Leimer are the authors of ‘Beyond Good: How Technology is Leading a Purpose-Driven Business Revolution’ and the Founders of Unconventional Ventures. I was joined in this discussion by my co-moderator Darren Franks, the Founder and CEO of TalentintheCloud International. 

If you weren’t able to join the conversation, here are the main topics we covered and the key learnings I took from it.

How banking needs to change

While energy companies have accepted they are the worst offenders when it comes to climate change and have turned to renewables in response, banking hasn’t had the same Aha moment about resolving financial inclusion. As a result, it can seem from the outside like only profit matters to these businesses. Current profits look obscene to many people and this needs to be talked about, with banks asking themselves “how much is enough?”

Big banks also need to address the fact that they no longer seem interested in wealth generation for most individuals. Already, around 15-20% of financial services have been ceded from large global banks to fintech, with the banks turning their focus to niches they view as profitable.

What is needed is more community banks, building societies and credit unions that are solving a fundamental local problem and have ‘doing good’ for the community embedded into their structures. Sunrise banks in the US are good examples of this because their employees reflect the people they serve, with half being female, 30% coming from communities of colour and 30% from a low or middle income background.

Embedded finance and fintech disruption

Embedded finance is all about bringing the core value of finance into another business model so it can empower the community. For example, purpose-driven businesses can bring the store of value service that banking provides to a community that needs it most. The banking and finance elements disappear almost entirely so that what is left is the value being delivered. 

In this way, embedded finance can help to bring financial management tools to the mass market. This seems like a real missed opportunity right now even though it can be done profitably. If finance providers are willing to help individuals grow over the long-term, they can also grow their profits alongside the people they serve. 

The key enabler in achieving this is how financial institutions embrace ‘empathy as a service’. This will lead to real disruption, rather than the type that many fintech startups claim to champion. After all, what is disruptive about offering a new credit card if the structures at the back-end are exactly the same?

Purpose-driven businesses to follow

Companies like Patagonia and Ben & Jerry’s were founded on the principles of ‘doing good’ and have this embedded into their structures. As a result, it doesn’t require a PR disaster or investigation to occur for it to take the spotlight. 

Right now, the technology giants who leverage personal data for their advertising businesses demonstrate the models to avoid if you want to be purpose-driven. In finance though, there are already examples of companies and individuals who are showing the way forward.

These include organisations like Mojaloop, the open source software foundation creating financial inclusion through interoperable payment systems, which is clearly dedicated to who it serves and why it serves them. The foundation’s Chairperson, Konstantin Peric, is a great example of someone who has moved up through the financial system but always focused on broadening who is served by finance how this is achieved. 

What leaders can do to help

Over the past year, when many economies have experienced a recession and many people have lost their jobs, the image of CEOs receiving record pay is not a good one. Therefore leaders who want to start a purpose-driven revolution in their businesses need to look at the people who are making the decisions. They should ask if these decision makers represent the people a business serves and whether they really know how to serve their community.

The truth is that everyone has leadership qualities in them but it requires strength of character to question an existing paradigm. The past year’s events have driven some to challenge the status quo but the onus should not be on individuals to fight their corner. It takes a village to change and it’s something that everyone is responsible for. 

A leader’s mindset should be to set a course with a purpose and keep moving forward in that direction. If they don’t, they should be aware that their employees can and will move to make sure the changes they want to see do occur.

Want to follow more discussions like those?

1.Visit the Fintech & Payments club website to be informed of daily events. The Fintech & Payments club comprises 30,000 members and followers on Clubhouse, growing every day. We run events every day on a variety of Fintech topics!

2. Follow me on Linkedin for new updates and live session write-ups.

3. Subscribe to my substack to follow my new series Beyond Fintech, exploring how Brands leverage Fintech to unlock new growth opportunities.