FinovateSpring 2017: A Recap


Navigator Edition: April 2017

First Annapolis attended the semi-annual Finovate conference showcasing innovation in financial technology.  The show’s format  consisted of a series of live demos which were just seven minutes each (a strictly enforced time limit – conference organizers stood ready with a gong to chase off slow talkers).  About sixty companies presented to an audience of bankers and technologists.

Figure 1: FinovateSpring 2017 Presenting Companies
Source:spring2017.finovate.com.

Companies on stage showed off concepts targeting a wide range of products and functional areas as illustrated in the chart below.  Lending, investing, and product-agnostic customer engagement (marketing or support) solutions received the most focus. Payments fell from prior years to comprise only 12% of presentations while the Identity & Risk and Process Automation categories rose due to an increasing number of regulatory technology or “RegTech” startups.

The lending startups and innovations were generally not lenders – 6 of the 17 companies demonstrated loan origination and servicing software and 4 offered new tools for credit assessment. This shift from disruptive to collaborative business models makes sense in the wake of parallel capital market disruptions and notable bank partnerships in alternative lending last year.  The only two lenders we saw on stage were focused on niches: MedPut offers medical bill financing to a growing market (more than 10 million people now have high deductible health plans) and Insto enables individuals and small merchants to offer installment payment plans guaranteed by Insto for a small fee.

Seven companies showed off payments-focused products or technology at Finovate this spring.  These included ACH Alert (fraud detection/prevention focused on bank transfers), PToll (a mobile app to manage road toll payments), Checkbook.io (a platform for consumers and businesses to send digital checks by email), Leondrino Exchange (a platform for merchants to issue their own digital currency), nanoPay (a cryptocurrency-based solution for banks to modernize multi-currency cross-border payments), Tyro Payments (a large Australian merchant acquirer profiling its new merchant cash advance solution), and PayNearMe’s re-branding to Handle Financial (an enabler of electronic bill presentment and payments).  It was hard to see themes uniting these presentations except perhaps the mass market adoption of mobile as a continued catalyst for innovation.  We were also struck by how none of these companies were truly startups – while many of the brands may be unfamiliar, these seven companies are on average eight years old.

Figure 2: FinovateSpring 2017 Best of Show Winners
Source:spring2017.finovate.com.

With all due respect to the companies on stage, nothing at this Spring’s Finovate stood out to us as highly disruptive or likely to gain fast traction among financial institutions.  (This was a similar impression we had after Money20/20 in the Fall – our event recap there was titled “2016: A Year of Execution”.)  There seems to be a lull in innovation at the moment but it would be reasonable to consider if we might really be in the eye of the storm.  We see several catalysts for payments innovation on the horizon including faster bank payments in the U.S., FI and corporate adoption of blockchain technology (e.g., more than 75 banks are now on Ripple’s network and both Visa and Mastercard have announced blockchain-based products), a proliferation of online marketplace/platform business models, the growth of cross-border commerce, and the rise of the Internet of Things (i.e., 10s of billions of connected devices from smart fridges to electric cars).  We remain optimistic about the potential for innovation and the opportunities that change of this magnitude  creates.

For more information, please contact Ben Brown, Manager, ben.brown@firstannapolis.com, specializing in Credit Card Issuing and FinTech Partnerships.

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