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Arguably the most interesting fintech conference around arrived in Las Vegas for its North American installment and there was plenty to discuss.
I’ve just about recovered from Money 20/20. Obvious statement but it’s quite a way from the 11:FS HQ in London to the Venetian hotel in downtown Las Vegas, the site for this year's edition of Money 20/20 USA.
I love going to the US. It’s so different, both in the good and the bad, when it comes to digital banking. It’s home to some well known challenger brands such as Marcus, Chime, Qapital and really interesting and rapidly growing firms including MoneyLion, Tally and Dave.
The event always offers a ridiculous amount of opportunities to meet new people and reconnect with old acquaintances. I couldn’t walk more than about 10 metres without either myself or Sam Maule bumping into someone else we knew. It’s a great community of fintech and financial services coming together for a few days.
Throughout the conference we heard a lot of talk about innovation, digital and being customer-centric. So far, so very obvious.
But amongst all of that, there were some important announcements, a couple of really great speeches and plenty of food for thought.
- Uber Money. Not the ‘Uber of Banking’
Let’s start with the big announcement.
For years we’ve all seen the slides discussing the ‘Uber of Banking’ ...well now we have Uber offering financial services.This was huge. The conference was buzzing about the announcement of Uber Money, a new division within the ride hailing firm.
What Uber Money is now doing is, essentially, providing banking services for its drivers. With real-time earnings, drivers will have immediate access to the money after every trip, rather than in weekly payments.
The existing Uber debit account is now being integrated into the Uber Driver app, with cash-back on fuel starting at 3% and going up to 6% to top tier drivers. Then there’s an updated Uber Wallet that drivers can use to manage and move money.
We’ve discussed the notion of the super apps in the East coming to the West and this feels like the start of it. Major moves from Uber. Ron Shevlin has a detailed breakdown on his Forbes blog that shows the breadth and depth of the moves Uber is making.
- Challenger outages and lessons learned
Chime, and fellow challenger Varo Money who were also hit by an outage, took to the same stage to discuss the lessons learned. In case you missed it, both banks were hit by an outage at a third party processor, Galileo, which left millions of customers temporarily unable to complete debit card transactions, get direct deposits, access ATMs or check balances.
Sarah Kocianski has already done an excellent job of digging into recent outages, and lessons learned from the UK.
Chime CEO Chris Britt, told attendees “trust is everything” when it comes to a digital bank’s availability. Colin Walsh, co-founder and CEO of Varo Money focussed on how to respond as a digital-only entity:
"You can't walk up to a physical location and look someone in the eye. You have to respond quickly, you have to respond empathetically”.
It will be interesting to see whether these firms, and other challengers, look to follow the likes of Monzo and build their own systems to reduce their dependence on a third party processor and reduce the likelihood of these types of outages.
- FDIC’s McWilliams shines
Every decent conference has a stand out moment. It’s not often that it comes from a regulator but in Vegas, the Federal Deposit Insurance Corp. (FDIC) Chair Jelena McWilliams was outstanding.
We’ve been fortunate in Europe, and the UK specifically, to have a regulatory framework and a regulator that is embracing innovation. To hear the chair of the FDIC talk so openly about the need for a coherent set of rules to help banks was music to my ears and I think to many in the audience. She has clearly observed what's happened in the UK, Europe and Asia and is rightly concerned the US could be left behind.
Of course, the regulatory structure in the US is still problematic - witness the recent OCC fintech charter issues - but McWilliams wants her agency to lead the charge, believing the regulatory framework needs revisiting as a matter of urgency.
“We have created the regulatory framework where we have actually discouraged banks from innovating for a number of years.How can we encourage banks to innovate? How can we bring that within the banking sector?”
More of that, please!
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