In June, Trustly popped over to Madrid to attend the second-annual MoneyConf. For two days, we met with old friends and made some news ones while discussing the future of finance. The verdict? FinTech is only getting more disruptive. Read on for key takeaways from some of our favorite sessions.
1. Data drives better decision-making.
Traditionally, data is a historical matter. It allows us to take things that happened in the past and detect trends in order to predict upcoming events. But Future Finance, a private student loan company in the UK, has flipped the system and is using forward-looking data to predict outcomes. Based on predictive data such as estimated income, employment rates and likelihood of dropping out, Future Finance can grant smarter, safer loans to students before they even graduate. “It gives us confidence to make a loan to that student that otherwise wouldn’t be available if you’re looking at the history of a student,” said CEO Brian Norton.
2. There are tons of innovative, non-banking uses for blockchain.
There’s a company called Everledger that’s recording every diamond’s provenance so it can crack down on diamond fraud. There’s a neighborhood in Brooklyn, New York, that’s using blockchain to trade solar power. Perhaps most interesting, says Chris Skinner, author of The Finanser, is the United Nations’ initiative to issue everyone on the planet a digital identity by 2030. Currently, 1.5 billion people don’t “exist” because there is no recording of their birth, so slave trafficking and human abduction is hard to prevent.
“I’m focusing on blockchain because I think it’s the next generation infrastructures of not just financial services, but of governance and the legal entity structures of contractual exchanges that will be built over the next decade,” said Skinner.
3. People are more likely to get divorced than switch banks.
Moderator Huy Nguyen Trieu of Disruptive Finance dropped this stat in a panel titled “How can banking become a level playing field?” “I don’t know if it’s true or not,” he said, “but it shows that banking is very, very competitive.
While challenger banks have the advantage from an IT perspective, incumbents have a leg up when it comes to regulation. “The way things currently stand, if you go through the door of applying for a banking license in the UK, it frankly would be easier to donate a kidney,” said Mark Mullen, CEO of Atom Bank. And he would know, having launched his challenger bank in the competitive UK market. “But why should it be easy?” he asked. “It shouldn’t be easy because you’re giving a license to somebody to literally go and print money. And you want to be bloody careful about who has one of those.”
4. People were just as uncertain of the implications of a Brexit before the vote as they are now.
The topic of the impending Brexit vote came up during nearly every session at MoneyConf, but the response was always the same: It’s unclear what a British exit from the EU would mean. Even after the UK has voted to leave, what the decision actually means is very fuzzy.
As for Trustly, which recently announced the opening of its new London office, we remain fully committed to our strategy of UK expansion and Brexit does not change that. “The UK remains a large market in which we see major commercial potential,” said CEO Carl Wilsson. Stay tuned for more developments on how we proceed!