The Future of Banking + Fintech as Seen at Money 20/20 Europe

Beyond being the biggest event in financial services, Money 20/20 provides a hands-on opportunity to see and experience the most significant trends in the banking industry. Here's a recap of the biggest takeaways from three days in Amsterdam.

Within the first few hours of Money 20/20 in Amsterdam, it was already clear what the hottest topics were going to be — and what was going to be missing.

Across the expanse of exhibit spaces, presentations on multiple stages, and talk among the 8,000 attendees from every facet of financial services, recurring themes became apparent. The list included embedded finance, open banking, payments, banking-as-a-service (BaaS) and tech solutions for businesses (B2B). Artificial intelligence, especially generative AI, was a very hot topic, though it was apparent that this technology is still in its infancy in the banking industry.

What was much harder to find were crypto, blockchain applications and tech solutions for consumers (B2C).

“It was clear that open banking and embedded finance were central throughout the event, and I think this confirms what many of us see as the key strategic challenge to banks around distribution.”

— David Birch, global fintech advisor

Despite the upbeat energy overall, an undercurrent of anxiety also could be felt. This was fueled by concern about the challenging economy, the limited availability of venture capital, and the reality that some of the sponsors at this year’s event may not be around in a year. It was also clear that some sponsors and attendees were using the event to build partnerships and collaborations and to potentially find funding for solutions that have not yet reached scale.

Here are some of the major takeaways.

HSBC Will Support SVB UK as Standalone Unit

On day one, Ian Stuart, the chief executive of HSBC UK, stressed that Silicon Valley Bank UK, which was acquired following the failure of its counterpart in Santa Clara, Calif., will remain a standalone entity. Though HSBC’s acquisition of the tech-focused bank’s London arm in March was welcomed, there had been some concern about whether a large traditional bank would fully support the activity of the much more innovative SVB UK.

“We’ve got a very good bank in the UK and we’re going to keep it standalone,” Stuart said. “Then, we will add our product suite and expertise onto that.”

Stuart also addressed the “elephant in the room” regarding whether HSBC will let SVB UK continue to grow. “We have been trading for 150 years and taken risks all over the world,” he said, adding that after HSBC integrates its product suite and expertise, it intends to take SVB UK global.

While the session featuring the interview with Stuart seemed somewhat regional in nature initially, the theme of fintech and traditional bank collaboration permeated the entire Money 20/20 event.

Read more: Five Megatrends Impacting Banking Forever

Data, Insight and AI Create a Lot of Buzz

The components of data, analytics and AI are more interconnected than ever and are having transformative effects on banking operations, customer experience, risk management and strategic decision-making. Solution providers on the floor and speakers on stage continued to emphasize how organizations must leverage data to understand customer behavior, identify patterns, predict market trends and personalize services.

Beyond the basic uses, banks, fintech firms and solution providers were challenged to advance the use of these tools to make informed decisions, improve operational efficiency, and enhance innovation and transformation. There were many solution providers at the show who were looking to collaborate with others to facilitate improved data utilization.

More than one session at Money 20/20 referenced the need to “act now, start simple and scale quickly.”

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Buy, Sell, Collaborate: What Is Fintech’s Future?

With the combined impact of economic uncertainty, a significant drop in VC funding and the recent memory of the collapse of Silicon Valley Bank, almost everyone on the floor of the Money 20/20 event, as well as many of the speakers on stage, were discussing the overall viability of fintech companies. The question often became who will be the buyers of solutions, who will need to sell, and who may opt to go forward in collaboration with others?

The vibe was often similar to fintech “speed dating,” with almost everyone looking for partners. This became very evident in the “Connections Lounge,” a space with 100-plus tables where more than 8,500 15-minute meetings took place over three days.

From my perspective, the difference between this year’s Money 20/20 event and previous years was the prominence of back-office infrastructure solutions, as opposed to those that were more customer-facing. At a time when the vast majority of fintech firms lack scale (and revenue), the question usually was whether a firm was trying to buy, sell or collaborate. For B2B solutions, the vibe was that firms were looking to invest, as opposed to B2C solutions, where most solutions were looking to be acquired.

Read more:

Word Bingo: ChatGPT

Not surprisingly the term “ChatGPT” (or generative AI) was on everyone’s lips — part of almost every conversation, presentation, sales pitch and meet-up. Annerie Vreugdenhil, the chief comercial officer of personal and business banking at ABN AMRO, described how her bank had already deployed ChatGPT in its contact center to summarize calls that have occurred between agents and clients. Vreugdenhil said this process has eliminated the need to take notes during calls as part of early tests, with a wider rollout expected soon.

“GenAI took center stage, overshadowing last year’s crypto hype. This new tech opens up a world of possibilities. Nevertheless, discussions revealed there are a few hurdles to overcome, such as transparency, privacy, security, regulations and scalability, to unleash its full potential.”

— Sudip Khan, Raiffeisen Bank International

Teo Blidarus, CEO and co-founder of infrastructure firm FintechOS, told CNBC that generative AI has been very powerful for his platform, which allows users to build their own financial services with little technical experience.

Though other firms also discussed testing ChatGPT technology at Money 20/20, it was abundantly clear that generative AI is still in the infancy stage within the banking industry, with the talk far overshadowing actual implementations – at least so far.

Read more:

Embedded Finance and BaaS Reformat Legacy Banking’s Role

Globally, banks are completely reinventing their legacy business models to keep up with evolving expectations of consumers and businesses. Many are creating new solutions, brands or entire digital banking units that are digital-first and customer-centric. More than ever, they are leveraging outside partnerships and collaborations to deliver financial services more efficiently and at scale.

“Demonstrating the value of embedded finance in relevant user journeys – for private individuals and companies alike – and bringing them to market, is a natural next step.”

— Christoffer Malmer, SEB Embedded

To drive revenue and enhance customer experiences, many firms are relying on embedded finance and BaaS solutions. In an IBM-sponsored Banking Transformed podcast interview, Claire Calmejane, group chief innovation officer at Societe Generale, highlighted the importance of fintech partnerships to build new products, services and revenue streams beyond legacy solutions.

“We are often looking for the most efficient way to deliver our products, and often we can’t do this with our legacy technology,” Calmejane said.

In a separate interview, Christoffer Malmer, head of a new unit at the Swedish bank SEB that is focused on BaaS, discussed the power of scale with embedded banking. “It is a scale game, and embedded banking is an opportunity for SEB to go cross border because, from a technology perspective, we think of SEB as a software company that can travel borders,” said Malmer, whose unit is called SEB Embedded.

Read more:

Post Mortem: What Too Many Fintech Execs Are Missing

Despite Money 20/20 being an amazing experience, I continue to be frustrated by the way organizations present what they do to prospects on the event floor, in one-to-one conversations during social events, and on stage during presentations. There is little differentiation between the “elevator speeches” made.

Most participants at an event like Money 20/20 are looking to make a sale or build a relationship with another person or company. Yet few understand the difference between an overarching corporate vision on what they want to be and the value proposition of what the potential partner or buyer wants to buy.

At a time of economic uncertainty, buyers don’t buy visions, they buy specific solutions to meet a very important short-term need. They want a composable solution that can generate a positive ROI in the short term.

While the event was almost overwhelming in terms of the number of conversations, surprisingly few questions are asked by sellers. Everyone wanted to be a presenter.

“There’s a huge opportunity for fintech businesses to differentiate themselves more … in how they go to market and also how they show up at events like Money 20/20,” said Eric Fulwiler, co-founder and CEO of the brand consulting firm Rival. “Walking around the conference, so many of the brands and stands blend together and aren’t that memorable a week later. They must stand out, grab attention, be memorable and communicate what makes their product different emotionally, not just what makes it effective functionally.”

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