Thoughts of the Day From WIRED Money Together With BBVA 2016 in London

As Thursday comes to an end, another big event in the financial world resumes, perpetuating a fresh chapter in the discussions around the latest trends in the industry. Right after the MoneyConf in Madrid, LTP’s CEO Aditya Khurjekar had the pleasure of attending the WIRED Money together with BBVA, an annual one-day summit that brings together insights from the sector’s newcomers and entrepreneurs as well as established financial powerhouses. The summit offers a fresh focus on the fast-changing industry and introduces, explains and predicts the changes affecting the world of banking, finance and money.

The agenda of the summit included such topics as the new bank, the rise of the machines, the potential of the distributed network, democratized investing, efficiency and insurance. Among the speakers were the leader of FinTech players such as Epiphyte, Colu, Starling Bank, Azimo, Kabbage, Motif Investment and many others.

Open or not to open? BBVA’s take on APIs

Image source: WIRED

Among some of the interesting topics is our long-favorite APIs question with regard to banks. BBVA's Sharmir Karkhal shared insights on the ways the bank wants to use APIs to improve customer experience.

BBVA is known to be one of the most innovative financial institutions and Karkhal has described his vision for BBVA's open APIs as an "AWS of banking," WIRED reported.

While conservative minds would protest to the idea of spreading precious banking data across the world by opening APIs, Karkhal explained the main idea is to enhance customer experience by sharing data on the ways customers interact with brands across banks and businesses. The data on the ways customers interact with websites, apps and other properties can provide important insights on what customers want from the financial services.

Nobody understands insurance

Given that there are already at least 80 very interesting and promising InsurTech startups, it came slightly as a surprise that one of those startups thinks nobody really understands insurance yet.

"I don't think the startup system understand insurance at all. I don't think venture capitalists want to put the time and effort in to understand," said Kim Miller, the CEO and Founder of Guevara, a peer-to-peer-based insurance company.

Miller believes that if companies and investors want to disrupt insurance, they need to understand it.

Another interesting insight from Miller was regarding the relationships between incumbents and young tech startups. Miller fairly noted that "incumbents have historical claims and cost data." It gives then the upper hand in making accurate predictions and tells everything they need to know about their customers. New startups, on the other hand, don’t have that luxury to start with. However, the leader of Guevara believes that those fresh startups have an advantage of agility; their freedom allows them to innovate quickly innovate and develop new models. New startups bringing machine learning and AI into the scene will be the ones to compete with legacy firms.

Another InsurTech leader, Christina Kehl of Knip, supported the idea, saying, "Insurance carriers just don't get it. They can only aggregate their own policies – but people don't want five apps for each of their policies, they want one. Insurance companies are just unable to innovate from the inside."

Old darling blockchain and how it may kill national currencies

Blockchain is never left aside when it comes to discussions in the financial world. Distributed ledger technology has been brought up in regard with building a unifying fabric for banks by Epiphyte. Epiphyte CEO Eden Yago spoke about the way his company allows higher visibility in international transactions, and created an online system that is "riskless, basically instantaneous and very, very cheap.

Another blockchain company, Colu, shared insights on the way blockchain could kill off national currencies. Colu’s Co-founder and CEO Amos Meiri stated that connected cities are the drivers of economic growth and change and over time the need for people to feel connected with each other in various ways, including trade, will be more pressing than ever.

Recognizing the necessity of seamless financial transaction experience, the blockchain-based startup creates local currencies that can be used to buy and trade goods within communities, increasing co-operation and encouraging social projects, WIRED reported.

By providing an opportunity to create own currencies, Colu supports the local businesses communities and fosters economic growth internationally.

High street banks are so yesterday news, it’s time to embrace the cloud

Image source: WIRED

Anthony Thomson, the Founder of Atom Bank, the UK’s first mobile-first bank, gave an insightful presentation on the way businesses should think about providing financial services emphasizing the necessity to put customers’ needs first, even before profits. Thomson believes that the purpose of business should be to give your customer a better product, service or experience.

Referring to traditional banks being yesterday news, Thomson said that today’s money is digital, hence, the very rationale that underpins banks has gone.

Modern customer preferences have evolved and they want to be able to access their money easier and receive greater levels of usefulness from their banks.

The key to stop fraud is in combination of AI and human intelligence

Paulo Marques, the Founder of Feedzai, a fraud prevention company powered by big data, commented on the importance of humans in building fraud fighting solutions. As Marques commented, If you want to stop fraud, you really need to understand human behavior.

While many financial institutions are heavily reliant on machine-based fraud prevention tools, the real answer to the most accurate solution is in the combination of machine learning and human intuition.

If we combine human intelligence with machine intelligence, we can prevent payment fraud, said Marques to the audience. By feeding human-derived insights to the machine, Marques added a layer of human intuition that software can never learn independently.

The bottom line: humans will not be replacing robots in the case of fraud prevention in the future; it will be an organic and beneficial collaboration.