Our Takeaways from M20/20: Bank of the Future, Fastest SME Loan & Income Smoothing for Freelancers
Money20/20 Europe is one of the key conferences that you cannot miss if you are a professional working in financial services. For the past 2 years, it took place in Amsterdam so not only you get to experience heavy content intake, create valuable connections but you get to spend 3 days in this exciting city.
Each year, Money20/20 Europe is attended by more than 6000 professionals from more than 2000 companies with roughly 500 speakers taking the stage.
This year's agenda was divided into 5 key industry trends:
1/ Innovation models in financial services
2/ Commercial models, value chains, and M&A activity
3/ Interoperable tech to create new value propositions (AI + cloud + blockchain + quantum computing)
4/ Adventures in open banking
5/ Moving across swim lanes: the movement of progressive companies into financial services and commerce.
Our Content Highlights
SME Lending Is Broken and Needs to be Reworked Globally
One of the first keynote speakers was Rishi Khosla from OakNorth, one of the highest valued European fintech unicorns. SoftBank Vision fund invested $440 million earlier this year in the company, giving ground to its $2.8 billion valuation.
OakNorth operates both a B2B and B2C product. On B2C side it offers loans to SMEs and mortgages to high net worth individuals based in the UK. On B2B side it offers its proprietary scoring algorithm and platform to banks and other financial institutions outside of the UK. Moreover, OakNorth was the first bank fully operating on cloud infrastructure and the company uses thousands of various non-traditional data set and AI to analyse the company's future performance.
'SME lending is broken and we are here to solve it on a global scale'. Rishi Khosla, CEO of OakNorth
Spectacularly, OakNorth lent over $3.7 billion to British businesses without a single default or late payment since its launch in September 2015. One of the key reasons mentioned by Rishi is proactively working with their borrowers - instead of passively ‘waiting’ for the first late payment as most incumbent lenders do, they proactively monitor businesses and engage with them early on in ‘positive conversations’, providing early warnings of potential cashflow troubles ahead.
The Secure Bank of the Future
Ralph Hamers, CEO of ING Group, shared his views on how bank of the future should look like. According to Ralph successful bank has to be purpose driven and people should come to work motivated to work there and to serve customers. Secondly, the bank of the future is absolutely digital and mobile first. ING Group currently boasts 38 million customers who interact with the bank 4 billion times annually through the bank’s digital channels.
'26% of our customers have never had an interaction with us through a physical channel' Ralph Hamers, CEO of ING Group
Bank of the future is personal, instant, relevant and provides a seamless experience. Ralph believes that the future business model lies is platform based. In his definition, the platform business model takes on two implications:
1. Build your business on technology which can be scaled to other markets with almost zero marginal cost. Enable the business to scale underlying technology modules horizontally across the organization and geographies
2. Offer third party and other external products to your customer base. Case in point - ING’s new brand and platform called Yolt. Yolt aggregates customer’s bank accounts and provides an easy way to see and manage them from one app. It is currently live in 3 markets and managed to onboard 1 million users in 1,5 years.
'No customer will keep returning to you if you only offer your own products' Ralph Hamers, CEO of ING Group
Every year there are several promising fintechs selected to pitch at Money 20/20 Europe. 3 of them are selected to pitch on the main stage during the last day. This is a great opportunity not just to raise capital but to get some publicity too.
These were 2 early stage fintechs which caught our attention this year:
Trezeo provides financial stability for self-employed workers in the gig economy by turning unpredictable income into regular pay cheques. We find this particularly great as the number of self-employed people globally is rising. Trezeo takes away the uncertainty by providing a steady weekly pay cheque for the self-employed even during. As a customer, you only repay what you borrow and build up your credit score over time. So far, Trezeo raised $854K with latest round led by Techstars.
Tully set out to help 23 million people in the UK who are worried about money. Tully will help you build an accurate and realistic budget online. Using that budget Tully will offer personalised debt advice with a clear path out of the debt trap for its customers. The company plans to offer flexible debt management plan with payments that can go up and down every month based entirely on what the consumer will be able to afford.
Numbers Not To Miss
Hoyoung Youn, CEO of Kakao Bank revealed that “It takes 7 minutes to open a new account, 3 minutes to send money abroad, 1 minute to receive a microloan and 10 seconds to send money to your friend”.
Christoph Rieche, CEO of iwoca shared that “It takes us 3 min and 26 seconds for SME loan from application to money disbursement to the SME borrower account; it is the fastest SME loan in the world. Banks typically take up to a few months, other companies take a few days.” 70% of applicants receive instant automated decisions on the iwoca platform, out of which 90% can withdraw money for immediate use.
If you ask as if we recommend going to Money20/20, the answer is definitely yes. This industry-leading event is a great opportunity to meet senior people from banks, VCs, fintechs and various service providers. If it is your first time we guarantee you will be overwhelmed but amazed at the same time by the sheer amount of content, networking and afterparties.
Every year we offer 200 EUR discount code for Money20/20 tickets to our network - do not forget to subscribe to our newsletter to be the first to know. Once a month we send out a concise newsletter where share our internal insights, best of best fintech research worth reading and we share one or two exceptional non-fintech technology resources which caught our attention in the past month.