Apple’s annual WWDC (World Wide Develop Conference) opened in San Jose this week, but Apple’s legendary co-founder Steve Wozniak – or “Woz” to his many fans and friends – was nowhere to be seen. The reason for his absence was that he was at Money 20/20 in Amsterdam, to have a “fireside chat” with 5,000 of the movers and the shakers, the wannabees and makers of the fintech world instead.
So why would the man regarded by many as a pioneer of the personal computer revolution (and four decades later, still on the Apple payroll) be asked to come and share his views and predictions for the future at Money 20/20? Well, because the fintech world has turned a whole lot geekier.
Many delegates identified themselves as nerds, geeks and entrepreneurs. Business suits were a rare sight, ties were pretty much non-existent, and even Ralph Hamers, CEO of ING Group, took to the stage “where normal rules didn’t apply” to deliver his opening keynote wearing a pair of Puma sneakers.
OK, arguably there is always going to be a sense of change and excitement in the air at Money 20/20 – but this genuinely felt different. Fintechs have moved on from just talking about the cloud, or compliance, or cybercrime. Sure, these are still important – but the mist around the fintech crystal ball is clearing to reveal two, maybe three, big trends for the future.
The first is Open Banking. An acronym you will hear a lot more of is “API”, which if you don’t know what this means, the inner geek in me (and expensive university education) can reveal it stands for “Application Programming Interface” – or, in plain English, specifications for how software components from different apps and vendors should interact. Why does this matter? Well firstly, in several countries and territories, it has been directed by the regulatory authorities. But more usefully, it gives third party providers secure and controlled access to consumers’ financial information, enabling new services that could benefit consumers or reduce their costs.
The second big deal at Money 20/20 was blockchain, particularly in relation to cryptocurrencies. Many speakers conceded that blockchain technology was at the alpha or beta stage, and the real use cases were yet to be identified. But everyone, including Woz, made confident predictions that blockchain is on the right path, and it is now a case of when - not if - it plays a critical part of our payment mix in the future. Many of the speakers from big banks also outlined how they are preparing for the future, and some have already launched their own cryptocurrencies. But unsurprisingly, perhaps, when I offered to pay an Amsterdam taxi driver in Bitcoin, he nearly lost control while laughing… but maybe not for too much longer.
The third big standout theme, and another acronym: GAFA. Or, “Google, Amazon, Facebook, Apple” – the big, tech titans that provide the software platforms that enable the functionality that we all now carry around with us every day. Many extend this to “GAFAA” – adding Alibaba to the mix, and a new one to me, “FATBAG” which also considers China’s Tencent and Baidu. Most platform providers were represented by senior executives at the event, apart from Baidu and Apple (other than Apple employee # 1…), and the big numbers soon started to get bandied around: 300 million Amazon.com users, 800 million active WeChat Pay users, 2 billion Facebook users. How about 15 billion – any takers?
But egos to one side, GAFA collectively invests billions of dollars in to developing better experiences that delight their customers. In turn, people form much stronger relationships with the platforms in their pockets than with their banks. Platforms are enabling new business models across every industry, allowing people to focus on fulfilling their daily needs in better ways - and FI is no exception. And with Open Banking and open APIs enabling even greater integration, the message was clear: the balance of power has swung in favour of the big platforms, and if you are not moving fast then you are staying behind.
And so, it was ironic that at Europe’s largest and most important fintech event where the great and the good assemble to create the future of money, it was GLORY-sponsored Team Cash who won the payments race. Our racer beat his opponents from Team Crypto, Team Mobile, Team Wearables and drew with Team Card, in a race from Istanbul to Amsterdam using only a single form of payment to demonstrate the real-world challenges of different payment systems.
No surprise to me though: with 15 billion Euro banknotes in circulation, accepted and welcomed by just about everyone, how could Team Cash fail? As Team Mobile summed up their performance: "People love cash in the EU.”