April 8th and 9th, 2019
A summary report by S. James Ellis, PhD candidate FINDER program
FRANKFURT, GER. – The growing FINDER team convened at Atos’ Worldwide base in Frankfurt on Monday, April 8th, 2019. The multinational, interdisciplinary group traded introductions and immediately got to work setting the stage on trends in the fintech environment. Intuitive as such a first step might be, the importance of standardizing entry knowledge cannot be understated with an academic topic as novel and turbulent as fintech currently is. That turbulence might make “fintech” difficult to pinpoint and create useful conclusions about, but the continued production of knowledge about the topic and how it interacts with society is the quickest way to mitigate these difficulties and, not coincidentally, core to the FINDER focus.
Atos’ partnership in the FINDER program provides a birds-eye view on the development and operation of fintech organizations, which is often crucial for understanding how they originate, evolve, combine, and fail. Remco Neuteboom, senior vice president and chief digital officer of Atos’ Global Financial Services, and Olaf Badstübner, global director of Atos’ Financial Services, provided their professional insights into how the banking sector, often guided by tradition-oriented practices and approaches, interacts most and least effectively with the fintech sector, which often subverts banking institutions in its customer engagement entirely despite the transaction of financial assets.
This is arguably the essence of hype surrounding fintech. Abstracting from the barebones concept of “fintech” as just a mashup of “finance” and “technology,” fintech can comprise the people, companies, processes, and structurations that operate those technologies. Many of these aspects of fintech challenge the ways in which we normally conceive of a financial transaction. Consider the days in which you or your parents wrote checks to pay for, for example, groceries. You (or your parents) wrote the check and gave it to the grocer, but it was ultimately both parties’ banks that determined the terms of the transaction and the time in which it was completed.
In the modern day, you can walk into a store, scan your own groceries, and bump your smartphone against an NFC terminal and carry on with your day. Meanwhile, a whole cascade of processes that no longer orbit around the banks begins. While the Age of PSD2 does not seem to proffer any clear nucleus such that banks were, a major player in the game now is the fintech: a third party service provider whose value added is how it can operationalize the information that you choose to give it and that banks must give it. Considering how ambiguous this new paradigm is, it’s easy to imagine the broad diversity of fintechs that have sprung up to answer the call of consumer demand and structural necessity. These fintechs must start somewhere, which brings the FINDER team to TechQuartier.
TechQuartier is a business incubator that intakes small startups, provides a low-cost cooperative workspace for them, and provides forward guidance for their continued growth. The FINDER team convened at TechQuartier on the second day of the Frankfurt event in order to gain insights from Thomas Funke, managing director of TechQuartier, as well as several fintech founders who have passed through the TechQuartier halls. Familiar sentiments arose: the slow speed of banking institutions’ innovations are, in part, enabling the rapid development of fintechs. As the industry is discovering, this does not necessarily mean that fintechs stand to overtake these institutions as the primary engines of financial transacting – one speaker was Oliver Mahr, from the Deutsche Börse, who discussed the late-stage development of fintechs and how mergers and acquisitions driven by large legacy banks both provide stability and strength for fintechs and an innovative speed boost for the banks.
This is one of the research tracks that the FINDER team is investigating, and continuous working papers will provide operable knowledge for fintechs, banks, entrepreneurs, policymakers, and more on this topic as well as many others. The FINDER team will convene early September to begin its four year research duration, so stay tuned!