July 2, 2017
This week’s introduction is integrated with the first article. Consider it a small homage to the power of an integrated product.
"Over the next 10 years, innovations won’t be beautiful – they’ll be invisible.
There is plenty of buzz and coverage around the 10-year anniversary of the iPhone (rightly so). It’s impossible to overstate the impact Apple’s flagship product on the last decade so it’s not surprising FinTech got roped into the mix this week. Technology advancements, iPhone or not, were going to influence the FinTech revolution so the provocative title is a bit misleading. That said, the mobile era has unquestionably shaped the contours of the FinTech. That said, the importance (and credit) of the iPhone is not the technology itself but for creating a product that quickly became something everyone wanted and, almost, no one can live without.
The modern mobile phone (or pocket supercomputer) itself has plenty of predecessors to thank for its existence. It’s foolish to think anything today doesn’t owe something to preceding accomplishments and breakthroughs, societal or technological alike. As we scan the FinTech landscape today it seems preposterous mobile first is still a mantra oft-repeated, that some countries are virtually cashless, and consumers in the US still aren’t sure when (or how) they can use their phones to pay. On the other hand, the amount of change the mobile world has brought far exceeds any expectations you’d have for a global society in merely a decade.
Mobile first still isn’t the foundation for FinTech in much of the world. Banks and financial institutions have merely moved from the same analog, in person product from paper, to PC, to phone. We’re just now seeing the various mobile data inputs (location, behavior, biometrics, camera, etc.) reimaging the financial service experience. I hope this trend continues; however, technological progress is not for the faint of heart. New foundations – automation, blockchain, and machine learning – are making an industry just now grasping the transformational power of mobile anxious of missing out yet again. In the long run, the consumers will win but for the time being, keep experimenting and keep creating. The people shaping the contours of FinTech’s next decade are hard at work right now.
"Frankly, if you look at the neobank [as app-only banks are known] space — they’re flourishing everywhere but we’re still waiting for the business model to show up. Where is the money? Where is the return?"
Given the long introduction, we’ll keep these short. Connecting the dots between the iPhone and an app-only bank isn’t too difficult. Aside from his spectacular name, Maximilian Tayenthal, is focus on building a foundation for N26, an app-only bank out of Germany. Product by product, customer by customer, it seems Tayenthal is focused on the lifetime the value of his target customer – the 18 to 35-year-old. That long-term view is only possible with investment and patience. As the featured quote indicates, many are skeptical of the business model – the hype and the returns aren’t scaring any banks today. That said, challenger banks will continue to be written off as merely challengers, until they aren’t. If the 10-year anniversary of N26 garners as much (relative) praise as Apple, surely it will be because they started by nailing the fundamentals of technology and the customer experience.
In this complex world of FinTech – where taxonomy and business models could be too complicated to understand, and innovative startups difficult to keep track of… Thanks to LTP, we have MEDICI.
We have our own anniversaries and traditions at Let’s Talk Payments. We try to stop and look around every so often to give you, our favorite people, a holistic look at what’s going on in FinTech. Take a minute and a deep breath and check out our 2017 mid-year review – we promise you’ll learn something (get the infographic – it’s free!).
See you next week!