The first-ever virtual global MoneyFest from the Money 20/20 team was a success and truly reflective of the world we are living in today. Over four days, dozens of presentations captured the role of financial services in the COVID-19 world that has had such a profound impact on people’s lives and money. Financial institutions and fintechs serve a central role in supporting the global economy during the crisis and continue to facilitate a rapid and sustained recovery, even going as far as to implement relief programs on behalf of government agencies.
As banking and fintech have entered stages 3.0 and 4.0, and as the revolution of the one-stop-shop for financial products around banking, lending, crypto, stock trading, and money transfer continues to escalate, our focus shifts to the swell of financial services innovation that will continue in 2021 and beyond.
At Socure, we want to continue the conversation that began at MoneyFest, so we are sharing our key takeaways and observations from the event to encourage and inspire continued dialogue amongst our clients and industry colleagues.
Here are our key takeaways:
1) Power of A’s: In numerous sessions throughout the week, we noticed a dominant pattern in the use of words beginning with “A” to represent the state of the industry, describing COVID-19 outcomes, solution drivers, and long-view strategies. This “power of A’s” moniker serves as a navigational tool for everything from crisis management to how to solve complex issues in the new digital-first ecosystem.
- The demonstration of agility separated the wheat from the chaff when it came to COVID-19 responses. Jill Castilla, CEO of Citizens Bank of Edmonds, told the story about their remarkable pivot. When shelter-in-place orders went into effect that impacted community livelihoods, Jill and her team partnered with Mark Cuban to launch the ppp.bank website in record time to enable small businesses to apply for stimulus funds. Working with limited resources herself, Jill described it as a scrappy response to address accessibility to financial services in adverse times.
- The cornerstone of MoneyFest had to be the dozens of references to the accelerated adoption of digital technology experienced since the coronavirus pandemic began, with many consumers doing so for the very first time. Marcus by Goldman Sachs saw a whopping 50% increase in mobile app usage and a $32 billion surge in deposit volume, according to Adam Dell, head of product. Dell went on to explain that customers felt a need to create a financial safety buffer during this period of pronounced income interruption. He also highlighted customer advocacy, when he talked about the organization’s policy of utilizing data insights strictly to help improve the financial lives of their users.
- AI and machine learning continue to be a disruptive technology in both B2B and B2C applications. We heard numerous case studies on how AI/ML recognize patterns in data and automate separate tasks, including algorithms that detect fraud, chatbots to answer customer questions, logic fueling self-driving cars, and the charming personalities behind virtual assistants, as noted by Steve Wozniak in his keynote on Thursday.
- Data analytics help to speed adoption and create cutting-edge user experiences. Herman Man, chief product officer at BlueVine, explained that their ability to open a small business digital checking account in under 60 seconds ties directly back to how they analyze raw data.
2) Sophisticated fraud continues to plague the industry: In a riveting discussion featuring Jim Cunha, senior vice president of Secure Payments/Fintech at the Federal Reserve Bank of Boston, and Carole House, Cyber and Emerging Technology Policy specialist at the Financial Crimes Enforcement Network (FinCEN), we learned more about synthetic identity fraud, one of the newer types of fraud surfacing in a wide variety of businesses, including auto loans, healthcare, tax refunds, and utilities.
Rather than providing a stringent definition of synthetic ID fraud, as there is no industry standard today, Jim explained the fraudster’s goal is to create a new, fictitious identity that looks like a legitimate person with a good credit score, typically using fake or stolen PII. He said that the objective is to use the synthetic ID to steal or launder money and sometimes even to repair poor credit or hide a criminal background.
The insights were illuminating. Jim continued, calling out that 40% of the people who open synthetic ID accounts are brazen enough to do so in person. In most cases, a government ID is required, so presumably, fake documents are passing the scrutiny of such businesses during an in-person interaction. Carole added that FinCEN recently discovered that 600,000 Social Security numbers had multiple names attached to them, a number equivalent to nearly every man, woman, and child in the state of Vermont.
FinCEN and the Federal Reserve are both developing educational programs and tool kits to help the financial services industry better understand and thwart this elusive type of fraud. Jim added that there is a need for a collaborative effort to solve this challenge where there is link analysis across a portfolio or, better yet, across multiple portfolios or the broader industry. “More data is better,” he concluded.
3) Relationships are everything: When it comes to broadening capabilities, reimagining accessibility to financial services, and raising capital, partnerships are at the core of nearly every meaningful endeavor. There was no shortage of examples during MoneyFest. Forest Lin, president of Tencent Financial Technology, said that WeChat Pay was tapped by local Chinese governments during the COVID-19 pandemic to distribute vouchers to their 800 million active users that could then be redeemed for goods and services at merchants.
The COVID-19 outbreak has also enhanced the need for collaboration between financial services and fintech providers. In a session on how fintechs will succeed in a post COVID-19 world, Markus Ampenberger from Boston Consulting Group (BCG), highlighted this point and several of those endeavors, including the partnership between Unicredit and Taulia to broaden supply chain financing for B2B clients.
Markus also predicted that moving forward, high fintech valuations may experience a downward trend, opening up an opportunity for M&A activity. However, on the flip side, Stripe, Revolut, and Robinhood have all been able to raise massive funding rounds.
Markus concluded that BCG’s position is that fintech players should shift to a business model built on profitability versus a focus on pure growth and scale, in an effort to prove to investors that they have viable businesses that could survive a further crisis.
Finally, speaking of relationships, we want to thank everyone who took the time to connect with us during MoneyFest. We invite you to follow us on LinkedIn and Twitter to continue this dialogue. You can also reach out to learn more about Socure or schedule a product demo at firstname.lastname@example.org.
As the streaming sponsor of the first-ever virtual global MoneyFest, we are donating to Project C.U.R.E., the world’s largest distributor of donated medical supplies, especially PPE. Help us boost our donation! For every registered attendee of MoneyFest who signs up to download the post-show report, Socure will add a donation to this great cause to continue the fight against COVID-19. For an exclusive look into the week’s top-rated sessions and more, get your complimentary copy of MoneyFest’s post-event ebook here.
Tom is an executive leader with decades of experience at public and private technology companies that have defined or redefined markets in social, mobile, predictive analytics, digital identity, cloud analytics and security. He has a wealth of CEO and Board of Director experience in venture backed and publicly traded companies. Tom prides himself on leading from the front and helping clients to change their business model by providing innovative software that leverages machine learning and data science. Business experience spans six continents with high tech leaders based in Silicon Valley, New York City and around the globe.
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