Fintech’s next wave

3 min reading
21 October 2016
Fintech’s next wave
Fintech’s next wave


Shifting demographics, busy lifestyles, and an explosion of new technologies are just a few of the factors reshaping the way people manage their money. To assess the current state of Fintech, and to identify opportunities for the future, over 200 fintech entrepreneurs, forward-looking bankers, venture investors, and other thought leaders recently met in San Francisco. You’ll be surprised by some of their conclusions.

BBVA’s Fintech University was held at the former Federal Reserve Bank in San Francisco. Ryan Gilbert of Propel Venture Partners noted the irony of the forum taking place in a location so deeply rooted in history and tradition. Gilbert contributed an investor’s perspective of fintech. He observed that “all points of leverage have their root in data.”  He sees big data, AI, and machine learning, as ways to create massive competitive advantage. In order to gain (and keep) the support of investors, he also emphasized the importance of the “Tech” aspect of fintech. He noted a recent trend of startups placing too much emphasis on off-the-shelf technology, and not adding much additional value. 

Keynote speaker Shamir Karkal discussed his journey from co-founder of Simple, to head of open APIs at BBVA. He represents the voice of Fintech innovators in the planning and design of BBVA’s Open API platform. He discussed a range of banking APIs that can assist with smoother customer onboarding, account opening, card management, and quick and secure payments. Shamir used the example of AWS (Amazon Web Services) to illustrate a hugely successful open platform. His hope is to build an equivalent “AWS of banking”, and to make it widely available. On a more personal note, Shamir touched on what it takes to be a successful entrepreneur – persistence.

A Fireside Chat on payments delved into the relationship between emerging Fintech companies and established financial institutions.  A year or two ago, the conversations on Twitter, in industry publications, and at conferences focused on Fintech as a disruptive—if not destructive—force. In San Francisco, there was near-unanimous agreement about the need for banks and Fintech companies to partner.  A new financial ecosystem is taking shape. In this environment, banks can provide APIs, access to customers at scale, and deep expertise in managing risk and compliance. Entrepreneurs can bring new approaches to addressing customer needs, innovative product offerings, and bold design & user experience (UX). One important takeaway: finding the right partner will take time – several years, perhaps – but is essential to success.

Fintech companies have gained traction by reaching customer segments not always well-served by traditional players. Leaders from LendUp and Prosper Marketplace discussed the current state of alternative lending. This new crop of companies has expanded access to consumer lending, and has made huge advancements in simplifying the borrowing process. But, in 2016 growth across this sector slowed dramatically.  With high-profile news about CFPB fines, widespread compliance failures, and allegations of self-dealing, this nascent market has gotten a wakeup call. Regaining trust and building-out compliance are now rising to the top of the priority list. While compliance and risk are intrinsic to banking, it became clear in San Francisco just how vital this topic has become.

Fintech University was incredibly successful in revealing the latest developments in fintech. It is becoming clear that Fintech innovators and bankers alike share a win-win outlook, and seem committed to developing mutually-beneficial partnerships. Technologies like open APIs, big data, mobile, and AI, are being combined in unique and transformational ways. San Francisco lived up to its reputation as a dynamic place that fosters new thinking.

*This article is one in a series from BBVA about the latest in fintech and banking.

You can read more here.

It may interest you