As day two of Money20/20 draws to a close following another amazing day of keynotes, panel discussions and networking; we’ve collated a couple of our top takeaways from today’s sessions.
Fintech enters the metaverse
It’s hard to avoid the hype surrounding the metaverse and this morning’s panel discussion asked the burning question on the lips of many fintechs: Where can fintech companies do something substantially different in the metaverse?
With industry heavyweights from HSBC, Citi Ventures and Binance taking centre stage in Amsterdam, they discussed the factors and reasons for fintechs being attracted to the metaverse.
The metaverse itself can be difficult to define, especially with a variety of views of what it actually is – and isn’t. As lines blur between real and virtual worlds, the metaverse could be described as a network of virtual worlds that facilitate connections between people, often alongside virtual economies, currencies and assets.
While the metaverse hasn’t rocketed in popularity just yet, many individuals and institutions are investing heavily in this new world. From Adidas and Givenchy, hosting virtual fashion shows, to private individuals investing in publicly traded companies that are tied to the metaverse, such as those in the gaming industry, or in Facebook’s own metaverse, Meta.
What’s more, as traditional bricks and mortar financial institutions fall prey to online challenger banks, the metaverse could allow the high-street bank to continue to offer ‘face-to-face’ services within a virtual world.
Today’s panellists discussed the opportunity for fintech firms to embed their services in the future of the digital economy and analysed those retail brands and tech giants that have already entered this new, virtual world.
And yet, as the ability to purchase assets such as virtual land, NFTs (Non-Fungible Tokens), real estate and currencies becomes increasingly popular, what kind of opportunity or, indeed challenge, does this pose to compliance teams?
Often, real estate purchases are supported by solicitors, detailed ID and KYC checks – but how will this be handled in an entirely virtual world?
The metaverse could, in theory, provide an opportunity for financial institutions and regulated businesses to evolve in a way that we could have only dreamed of 10 years ago. Could ID or liveness checks be carried out ‘in person’ in this virtual world, supported by cutting-edge KYC or KYB technology to authenticate and cross-reference the information from the metaverse?
Granted, this will need a significant evolution of regulation and guidelines, but the opportunities for fintechs entering the metaverse seem, for want of a better world, otherworldly.
The importance of stickiness for financial institutions
Customer retention for financial institutions is becoming increasingly challenging. With the rise of challenger banks and fintech tools luring customers away from having purely monogamous relationships with institutions, the strategies that retain consumers must always evolve.
At its core, becoming truly sticky is about being convenient. Convenience is a major contributor to our decisions as consumers to engage with any brand or service – and financial services are no exception. Using a bank is, and should be, an easy part of everyday life for consumers. From effectively communicating products and services which matter most to them. (for example, sending consumers in their 30s information about buying their first home, or those in their 60s information about preparing for their retirement), to keeping them up-to-date with the status of their accounts with automated notifications about any transactions or alerts.
This convenience must be backed up by a seamless experience for the consumer. From early ID&V checks when opening the account to ongoing interactions with the institution; engaging with their bank should be effortless. A financial institution’s compliance obligations shouldn’t make the customer experience an inconvenience.
In a lunchtime panel, four experts from across the financial landscape came together to discuss how financial institutions can remain sticky in the face of this digital-first consumer. Jonathan Wilson, Chief Risk & Compliance Officer at AU10TIX reiterated the importance of a convenient, seamless customer experience, right from day one: “Success is creating a frictionless experience in a world run by regulation and compliance.”
Importantly, it is key that financial institutions are taking full advantage of the tools and technology available to facilitate, and allow, stickiness to develop. The goal here is to give consumers very little reason to stray to competitor banks or other institutions for their financial needs.
Javier Lipúzcoa, Head of Digital Banking Italy BBVA put it so eloquently in stressing the importance of developing relationships with software and solution providers that help in making financial institutions truly sticky: “Find solution providers that will help you get the results you’re after!”
We at NorthRow agree that retaining customers is far better on the bottom line than having to keep filling the top of the funnel with new customers. You can read more on how Understanding Your Customer can support the growth of your business here.
Meet the NorthRow Team
If you’re at Money20/20 this week, please stop by and visit the NorthRow team on stand E66 in Hall 7! Or, if you (like me!) are keeping up-to-date with all the latest Money20/20 news from a distance, follow along to our live updates over on LinkedIn or pop back to our blog at the end of each day for a roundup of the most fascinating topics from the event.