Rory Holland’s Post

Will fintech and banking merge? Your answer to that question probably looks very different depending on what part of the industry you work in. Our CEO Rory Holland, has some thoughts he shares here on LinkedIn, and also in a recent blog post: https://lnkd.in/eEadaRf6 #fintech #digitalmarketing #financialservices

The last paragraph says it all in that whilst the FinTech's have challenged the status quo, the lack of differentiation (or limited ability to do so) in their product offering has merely served to push traditional banks to follow suit with providing a similar customer experience. The next decade will be telling as providing the best customer experience at the expense of generating profit will force both fintech's and traditional banks to think differently on how best to serve customers. Some big decisions to come no doubt in coming years for the retail industry.

Fintech Leadership Shakeup: key moves in January 2024 🚀 The fintech world is already buzzing with some exciting changes this January. Big names are moving around and taking on new challenges. Thunes, a cross-border payments infrastructure platform, has appointed Floris de Kort as its new CEO to drive growth. The former CEO, Peter de Caluwe, has been promoted to Deputy Chairman to concentrate on strategy, mergers, acquisitions, and expansion into key markets. Volt.io , a real-time payments gateway, has welcomed Irina Chuchkina as its first Chief Marketing Officer, following her tenure at Thunes, Rapyd, Grab, and Visa. Christophe De la Celle, formerly of Binance and Numeus, has joined the esteemed Selini as Chief Commercial Officer. Digital Bank Chetwood Financial Limited Financial announced Julian Hynd as its new Chief Operations Officer. Capital on Tap, a UK-based SME lender, announced a significant leadership change. Co-founder David Luck has passed the CEO baton to Chief Product Officer Damian Brychcy after more than a decade. Luck will take on the role of Executive Chairman. PayPal has appointed Simon Bladon, former Managing Director of Customer and Digital at Barclays, as its new UK CEO. Alexander Matthey CTO of the Dutch payments giant Adyen, has announced his departure at the end of 2024. Helen Bierton OLY BSc Hons, former Chief Banking Officer at Starling Bank, has joined Lloyd's as its Everyday Banking Director, overseeing retail current and savings accounts. ClearBank has made significant hires, including Megan Cooper (ex - Barclays) as Chief Product Officer and Paul Staples as Group Head of Embedded Banking. Nick Ford joins as Group Head of Channels and Alliances. James Hopkinson, CFO of Metrobank Bank, is set to depart in the first quarter of the year, with Cristina Alba Ochoa stepping in as interim CFO from January 15th. 10x Banking, a core banking platform, has successfully secured a new funding round and appointed Matt Mills as Chief Revenue Officer, who joins from Featurespace. Lean Technologies has announced several strategic hires, signaling the company’s focus on continued success and growth. The new team members include Tewfik Cassis as Chief Product Officer, Nabil Dar as Vice President of Finance, Denis Korchuganov as Head of Engineering, and Rita Sahir as Head of Customer Success. Mangopay has welcomed Liz Oakes, former VP at Mastercard, to its board as a Non-Executive Director. Liminal Custody Solutions has named Amir Tabch as CEO for the Middle East region, bringing over two decades of experience in traditional and digital asset markets. ADVANCE.AI has appointed Dennis Martin as CEO of its credit reporting business. TradeCore has named Igor Jović as its CEO, who was previously a CEO, co-founder, and board member at City Expert. Research credit: Anel Ducic - Senior Consultant - Mana Search #Fintech #moves #leadership

In an insightful article from The Financial Brand, the key to thriving in the competitive fintech landscape is clear: retail banks must focus on the "jobs to be done." This customer-centric approach involves understanding and addressing the specific needs and problems of clients, rather than just offering generic solutions. By honing in on what customers truly want to achieve, banks can tailor their services to provide exceptional value. Whether it's simplifying financial management, enhancing user experiences, or offering innovative products, the goal is to meet customers where they are and help them get to where they want to be. As we navigate this fintech revolution, let’s remember that success lies in our ability to listen, adapt, and innovate. By defining and executing the jobs to be done, retail banks can not only compete but also lead the way in financial services.

Japanese conglomerate Rakuten is considering merging its financial operations into one unit. The plan, announced Monday 1, would consolidate the company’s bank, insurance, securities, and card company and other Fintech businesses into one group. “This decision is based on the belief that enhancing the collaboration across FinTech business, including prompt and flexible decision-making, along with the deepening of the collaboration including data integration and AI utilization, is crucial for providing innovative financial services and adding more value to customers,” the company said in its announcement. “On the other hand, Rakuten Bank has been working to further expand the customer base, strengthen the revenue base, and capture growth in the FinTech domain, aiming to become a leading fintech company in the age of zero cash.” The company said the reorganization is expected to take place in October. Research by PYMNTS Intelligence has shown that consumers like the idea of combining banking and other financial services into one place, or more specifically, one app. Close to 7 in 10 consumers in the U.S. and Australia said they would merge their digital retail and grocery shopping and bill tracking into a one-stop app, with convenience-focused consumers overwhelmingly saying they prefer to manage their banking, investment and various shopping activities via an everyday app. “Consumers expect an everyday app to deliver sought-after convenience: 59% of U.S. consumers and 37% of their counterparts in Australia cite seamless payment integration as a top benefit of using an all-in-one app,” PYMNTS wrote last year. “In addition, significant shares of consumers in both markets view an everyday app as a potential solution to minimize their app-related security concerns.” Meanwhile, PYMNTS recently examined the trend of collaborations between traditional banks and emerging digital players in a conversation with Dave Scola, CEO, U.S. at Form3. While the continued shift to online channels in banking is “certainly here to stay,” he said, that doesn’t mean banking has moved entirely into the digital realm, as there are still interactions that customers want to have face to face with their banks — mainly for high-value transactions. And those visits, Scola added, offer banks a chance to cross-sell other products and services. “Banks are loath to give this up — and understandably so,” said Scola. “They will want to preserve this as much as they can, going forward.

Welcome back to another edition of Fintech Wrap Up! This week, we’re diving into some exciting trends reshaping the banking and fintech landscape. First, we take a closer look at the rise of platform banking, where banks shift from traditional models to offering customers a digital marketplace of services. This new approach, driven by regulations like PSD2, allows for better customer experiences and opens up new revenue streams, but it requires careful strategy and investment. Platform banking is set to be a game changer in the financial world. Next up, we explore the transition from embedded to orchestrated finance. As fintech matures, we’re seeing the re-bundling of services. Companies like Wise and Revolut are great examples of how fintechs expand by integrating additional products, creating a seamless ecosystem for their users. This bundling trend is particularly relevant for bancassurance, where the embedded finance model allows for personalization and increased loyalty. Then, we shift gears to scaling fintechs. Moving from $1 million to $10 million ARR is the critical stage where companies go from a feature-driven business to a full-fledged platform. Companies like Netlify and Twilio illustrate how adding features and upsell opportunities can help fintechs expand their customer base and solidify their presence in the market. We also take a deep dive into Airwallex’s business model. Founded in 2015, Airwallex grew rapidly by offering affordable cross-border payments, and now, it’s evolving into an embedded finance platform. Their ability to process transactions through their own network gives them a unique advantage, allowing faster, cheaper international transfers and positioning them as a leader in cross-border finance. Lastly, we explore the Bank of Thailand’s Retail CBDC pilot, where over 4,000 users and 140 merchants tested a digital currency across live transactions. The test results offer a glimpse into the future of retail payments, showcasing the technical capabilities and real-world potential of central bank digital currencies. 👉 Read the full article https://shorturl.at/gGEMZ

Why NatWest's and Barclays Have No Interest In Acquiring FinTech's Like Revolut and Wise. NatWest’s announcement of their £2.5 billion acquisition of Sainsbury's banking business highlights a significant trend in the financial sector: larger banks are consolidating by acquiring grocery-related and brand spinoff banks rather than the innovative fintech startups that have been making headlines. In the last decade, the United Kingdom has seen the rise of numerous "successful" fintechs, including Wise, Revolut, Monzo Bank, and Starling Bank. These startups have often been seen as disruptive forces in the banking sector, pushing innovation and capturing millions of customers with their user-friendly apps and services. Despite their success, these fintechs have not become the primary acquisition targets for traditional banks. Instead, banks like NatWest are focusing on acquiring the banking arms of well-established grocery chains such as Tesco and Sainsbury’s, as well as large brand spinoffs like Virgin Money. This trend is evident with NatWest’s acquisition of Sainsbury's banking business, following a similar deal where Tesco sold most of its banking activities to Barclays for £600 million. Why is this happening? The short answer is Alignment. Fintech startups, with their high valuations and advanced technology stacks, often do not align well with traditional banks' core business operations. Their focus on innovation and disruption can be seen as too divergent from the stable, risk-averse nature of larger banks. In contrast, grocery-related banks and brand spinoffs offer complementary customer bases and more easily integrated business models. The assets acquired by NatWest from Sainsbury's include £1.4 billion in unsecured personal loans, £1.1 billion in credit card balances, and approximately £2.6 billion in customer deposits. These are traditional banking assets that fit seamlessly into NatWest’s existing operations. Additionally, Sainsbury’s and similar entities offer a large, established customer base that can be readily leveraged to enhance NatWest’s market position. Of course, the consolidation trend doesn’t mean that fintechs are out of the game. They continue to grow and innovate, potentially making them formidable competitors in the long run. However, traditional banks appear to be focusing on strengthening their positions through acquisitions that bolster their core operations and expand their customer bases. The acquisition of Sainsbury’s banking business by NatWest is a clear example of this strategy in action. It reflects a broader trend of consolidation in the banking sector, driven by the desire for larger banks to absorb smaller, complementary entities rather than disruptive ones. What do you think? Will this trend of acquiring spinoff banks continue, or will fintechs eventually become the primary targets for acquisition? P.S. Check out my newsletter https://buff.ly/3RXzt7Z

🌵🎈 Why many fintech can’t generate enough revenue to become profitable? There are multiple reasons for their strategic misconfiguration of digital intermendiation. Looking closely, we can identify same foundational issues. 👉 Digital engagement models add value to the intermediation processes only when they ELIMINATE FRICTION TRANSPARENTLY. Therefore, fintech misunderstating of what friction really is doesn’t allow adding value, and finding ways to be paied by clients for the value generated. Friction is not the same across financial offers like paying, borrowing, investing, or insuring. Yet, there are two major buckets of friction that I discuss in my latest bestseller “BANKS AND FINTECH ON PLATFORM ECONOMIES”. They are the “convenience friction” and the “knowledge friction”. “Contextual Banking” and “Conscious Banking” platform strategies address these two friction types as innovation slides on the Y-axis (information quotient) and X-axis (communication quotient) of the Banking Reinvention Quadrant (BRQ). How do platform strategies address friction elimination to generate value on the BRQ? ✅ THE CONVENIENCE FRICTION It’s the “opportunity” to eliminate friction with seamless engagement in non-banking ecosystems (embedded finance) that makes banking contextualized (invisible to clients), and generate NEW VALUE. Nota Bene: NEW VALUE is not found “inside transactions” because digital convenience becomes a basic expectation of clients very fast. Ultimately, the convenience friction must be priced “outside transactions” and inside the overall engagement process. Example: Amazon would be worthless without the convenience of 1-click payment. So Amazon key revenue stabilizes on Prime subscriptions that correspond to the cost clients are willing to pay for better accessing the frictionless platform. ✅ THE KNOWLEDGE FRICTION It’s the “need” to eliminate the knowledge friction in financial decision making that makes banking conscious (transparently visible to clients), and frees HIDDEN VALUE. Nota Bene: VALUE IS HIDDEN in relationships that clients have to pay for transparently. As financial products commoditize (example, passive vs active investing) and simplify to be consumed on digital, the value of tech is to help clients make decisions with effortless communications inside transparent fee-based advisory, not product fees embedded with opacity. Example: Revolut marketplace can add as many investment products they want. But without leveraging FOMO - and nobody should - clients will never resolve the knowledge friction to onboard safely making transparent decisions. In 2017, I asked the chairman of Amundi (largest European asset manager) what justifies the fees. He didn’t say any of his product but responded, with radical candor: it’s the process of transparent advice. ___ If you liked this post and want to learn more, find your link to bestseller “Banks and Fibtech on Platfrom Economies” in the comments section below 👇👇👇

Banking and FINTECH: A Partnership with a Future: The financial industry is undergoing a major transformation as technology enables new ways of delivering services, creating value and enhancing customer experience. FINTECH, or financial technology, refers to the software and applications that facilitate financial transactions on computers, tablets and smart phones. FINTECH is used by traditional financial institutions—commercial banks, thrifts and credit unions—to provide some services. But these institutions face stiff competition by nonbank FINTECH firms that offer innovative solutions for niche markets, such as peer-to-peer lending, buy now pay later, crypto exchanges and robo-advisors. However, rather than viewing FINTECH as a threat, banks can leverage it as an opportunity to improve their efficiency, reach and profitability. By partnering with FINTECH firms, banks can access new customer segments, offer more personalized and convenient services, and reduce operational costs and risks. For instance, Cross River Bank and Affirm have formed a successful partnership that enables Affirm to offer its buy now pay later solution, while Cross River handles the compliance and financial back end of the operation. Similarly, Stripe, a payment processor valued at $95 billion, works with hundreds of banks around the world to enable online commerce for millions of businesses. Of course, there are also challenges and risks involved in bank-FINTECH partnerships, such as regulatory uncertainty, data security, cultural differences and customer trust. Therefore, banks and FINTECH firms need to carefully select their partners, align their goals and expectations, and establish clear roles and responsibilities. They also need to comply with the relevant laws and regulations, protect the privacy and security of customer data, and maintain a high level of transparency and communication. Banking and FINTECH are not mutually exclusive, but rather complementary forces that can work together to create a better financial systemfor everyone. By embracing FINTECH, banks can enhance their competitive edge, foster innovation and deliver more value to their customers and stakeholders.