Paul Gordon, Senior Manager, Canadian Credit Union Association
It’s somewhat ironic that the Money20/20 conference takes place each year in Las Vegas, a location where a great deal of people typically wind up losing their money and hindsight (being 20/20), probably wish they hadn’t succumbed to Sin City’s allure. Luckily the conference itself is so jam packed with content that there really isn’t much time over the fours days to gamble unless you stay up until the wee hours.
Money20/20 is considered one of the top global financial conferences and attracts attendees from a broad range of organizations involved in the financial services industry from garage-based start-ups to multinational corporations, to global banks, technology companies and everything in between.
What struck me about this year’s conference was the broad range of topics that now fit in under the Money2020 banner. What used to be predominantly a payments conference has evolved to now include everything from Artificial Intelligence, Machine Learning, Globalization, Digital Identity, Biometrics, Blockchain, Marketing, Consumer Behaviour, Fraud, Cybersecurity, and Financial Regulation. Of course, the conference wouldn’t be complete unless it had a smattering of Payments content to round things out, so without further delay here are my top takeaways from this year’s conference (in no particular order):
Mobile Wallets and Digital Payments are gathering some serious momentum. While most people still like to use their plastic cards to pay in-store, the rapid growth of e-commerce is driving the use of more digital payment options. According to a McKinsey study on consumer behaviour, PayPal is becoming a powerhouse for online commerce in the US with Apple Pay rising in popularity for POS payments. Globally, Alipay and WeChat Pay, which are huge in China, are starting to look at other markets for expansion, including the US and Canada.
Artificial Intelligence and Machine Learning will change financial services (at some point in time). AI was talked about across a whole range of solutions including wealth management, identity verification, data analytics, fraud management, everyday money management, customer service and sales. For an example of a customer support case, check out Bank of America’s virtual assistant called ERICA. And while AI can open up lots of possibilities there is also an inherent fear about how the technology will be used and the job displacement it will cause, not just in the financial services industry but across all industries.
Digital ID is a real problem looking for real solution. Joni Brennan, President of the Digital ID and Authentication Council of Canada talked about the work going on in Canada to create a national framework for a digital identity solution that involves both the public and private sectors. Other jurisdictions around the world are also creating their own solutions for national identity schemes. As our financial and non-financial lives become increasingly digital and with concepts like Open Banking gaining ground, it will become even more critical for all citizens to have a secure, verifiable set of digital identification attributes. The question is what will those look like?
Fintech is becoming more mainstream. There seems to be a general acceptance that Fintech is here to stay and a general attempt to focus more on partnership creation to serve customers in new and exciting ways. Technology will continue to evolve and allow new companies to find better ways of doing things. Fintech can help fuel new economies and create new platforms to innovate on.
Open Banking will become a global phenomenon. Better start preparing for the Open Banking wave, which started in Europe, to become a reality in North America sooner rather than later. While there are no clear timelines for when this will happen in the US and Canada, the principles behind the Open Banking movement are clear; provide greater financial transparency options to account holders, improve the customer experience and build a more sustainable service model. Financial institutions need to embrace the Open Banking concept and start thinking about building APIs which allow secure access to customer data to enhance the delivery of financial services to both their retail and business customers.
Blockchain and Distributed Ledger Technology are in, Bitcoin is out. There was very little mention of bitcoin or cryptocurrencies at the conference but there was lots of discussion about the merits of blockchain as an underlying platform for a plethora of different uses like digital identity, payment systems, loyalty programs, advertising and lending. Probably one of the more interesting sessions I saw was a head-to-head debate between a blockchain proponent from Ripple and a blockchain detractor from FIS about whether the technology could replace some of today’s prominent global payment networks like SWIFT. I don’t recall if there was a winner in the debate, but the message was clear, blockchain and distributed ledger technology has tremendous potential to change aging processes and systems.
So that was Money2020 for another year. A small glimpse into the future of financial services and the trends and technologies that will keep driving the industry forward. I suggest you get ready for a wild ride.