TRUSTECH – CANNES – What progresses have wemade in the past coupleof years and are thereany promising trends,companies or productswhich could impact fewindustries in the shortterm?
BY SEBASTIEN TAVEAU
Once upon a time…
Back then, banks and financial networks were in aggressivecompetitive mode against each others. This allowedsmaller more nimble tech companies to enter the worldof finance with little resistance at first (Intuit, Square,Stripe, Affirm, Poynt, Plaid, Yodlee, etc).
The important point was that these companies were nottrying to stay relevant, they were creating relevance forusers who had been left on the side of the road to recoveryby the large financial players and/or couldn’t reboundfrom the 2008 financial crisis within the traditional bankingframework. These new companies were each solving avery specific problem for a very specific audience. Physicalpayment acceptance for small and mobile merchants,instant consumer loans for non-traditional banking clients,online payment and risk management integrationfor SMB, financial data aggregation consumable via APIfor financial 3rd party services, etc.
…in today’s fintechtransformativeworld…
The past few years have transformed the way all playersapproached various problems and different challenges.
The hard reality is that incumbents and challengers havelearned to work together, to morph their business modeland to “coopete” in an intelligent way. Innovation is sometimesso subtle it can’t be detected. Banks have rampedup acquisitions, released simple but efficient products likeZelle or Marcus.com. Challenger banks in the UK are helping accelerate the necessary changes for legacy banks. Fintechstartups like Affirm, Square or Stripe have learned toidentify markets and customers who are underserved andunderbanked and change their views of working with largerplayers. The coopetition is becoming more and more thenorm via open technologies and business models. Companiesare realizing that they can’t do it alone and even further,that innovation is not the key but instead with smartintegration being what leads to success.
Building the fintechmagic kingdom
On the road to this futuristic vision of what could Fintechlook like in 2020 or 2025, it is important to rememberthat it is always hard to make predictions and these usually,especially the wrong ones come to haunt someone fora long time. However, not being superstitious, let us puton our imagination hat. In a near future, this script may bereflecting a reality closer than y ou think.
Winter is coming, you realize your wardrobe seriouslyneeds a refresh. What about purchasing that new winterjacket?After verbally requesting your mobile voice assistant (Sirior OK Google or Cortana) for a quick search of options,triggering a massive inventory search of various vendors,options, colors, size, availability, etc., all of these tailoredto your specific taste based on past purchases, preferencesand budget, you will be presented with few choices.
Now, still from within your conversational shopping interaction,you will decide which one y ou want.From there, your consumer bot will start negotiatingwith a merchant bot on price, size, speed of shipment andreturn policy. When the bots reach an acceptable agreement,maybe (or not based on user preference) a notificationwill be sent to you to either approve or continue thenegotiations.
If approved, your consumer bot/wallet/digital butler willcall upon a transactional token validating your ID, addressand payment method and any other elements necessaryto complete the transaction. Since payment/transfer ofvalue will be instant but secure, the merchant will justget the token basic data from a trusted digital token custodian.
However, this custodian would not held many ofyour information as these will be gathered from distributedlocations/nodes and managed via distributedassets. Could it run on Blockchain? Maybebut not necessary as distributed computinghas been around for quite some times.
When the transaction completes, allelements of it could be held in yourpersonal cloud/remote storage/ledger for future use. The data held in there couldalso be shared for better services, deals or offers but onlywhen you make that decision to release morereality or dream pipe?
If you look back at which companies didn’t exist 5 or 10years ago, we cannot really say what will be the realityin 5 to 10 years. However, the potential scenario aboveleveraged technologies and projects already being implementedand perfected today.
The Bots / Conversational commerce are already makinglightspeed progress with appointments being made betweenhumans and machines.This is possible because of the richness of digital data andthe capacity to work with these via Artificial Intelligenceand Machine Learning. And these can be exposed via APIs.
With the mandate of Open APIs coming from various regions,it is clear that more and more entities will be ableto gather data sources and generate new services, productsfrom them. Of course, all of this needs to happen inreal-time or instantly. With new payment rails/networklike Zelle, Paylib, FPS, NPP being created to address theneed for speed, it will be extended to other areas thanpayment, like user verification, disbursem*nt, settlement,insurance, etc.
Now, the key to all these elements interacting with eachother will be the various tokens being used. Key upcomingcompanies will be the ones able to either issue, retailor exchange these tokens or do all three at a time. Thechallenge however in these custodians of transactionaltokens (ID, transaction instrument, commerce, education,government, etc.) will be in whom do we put our trust andhow the regulatory bodies will see this in light of recentbreaches and compromised data sharing. This is wherethe concept of Zero Knowledge Proof (ZKP) could becomethe tie breakerand the winner is…
In the end, the main question is who will be best positionedto win in this new world? Platform providers whichis why when looking around, players like WeChat, Weibo,Xueqiu are leading the charge and Google, Amazon,Facebook, Apple (the GAFA) are trying to move into acontrolled environment with economics ecosystems andtechnology platform.
Building a destination is the start, making sure the usertrust and stay in this world is key.And then, there is the small detail of navigating new regulationsand regional restrictions.
