The future of banking: How the digitalisation revolution is changing the role of banks
Fintech is a highly dynamic sector. Startups are working in incubation centres, accelerators and shared spaces in Berlin, London, Johannesburg, Singapore, and New York. Corporate giants such as Amazon, Facebook, Apple, Google are also part of the picture. But while market leaders have emerged, no one really knows where the next successful payment system or bitcoin wallet will come from. Many ideas will make it to the market, but just as many will fail. The services that succeed will be those that genuinely make life easier, perhaps by blending fintech with other technologies.
This panel will explore the future of the banking system and implications of digitalisation for the world’s economies. Essential questions include how banks can create holistic customer solutions that combine financial services with a wider range of digital offers and how they can increase financial inclusion through digitalisation.
Opportunities and challenges for fintech startups in emerging markets
Fintech services in developed countries focus on online customers, but startups in developing countries are addressing a much broader market segment: mobile phone users. According to the International Telecommunications Union, an estimated 95.5% of the world’s population has access to a mobile phone Mobile money transfer services such as M-Pesa, an emergent technology that was first introduced in Kenya, have made major contributions in changing the economic situation of unbanked populations. In Bangladesh’s strong micro-finance industry (small-scale unsecured credit), the M-Pesa equivalent is called bKash, which makes sending payments via mobile phone quick and easy.
In 2013, the International Finance Corporation (IFC), a member of the World Bank Group, became an equity partner in bKash and in 2015, the Bill and Melinda Gates Foundation also invested in bKash to ensure access to an even broader range of financial services for the low-income masses of Bangladesh, with the ultimate aim of achieving broader financial inclusion.
Looking at the impact of fintech solutions in Africa, it is important to keep in mind that in 16 African markets, there are now more mobile money accounts than bank accounts.
This panel will discuss the opportunities and challenges for fintech startups in emerging markets and address issues such as how fintech startups can position themselves as technology partners of banks and financial institutions and thereby support the world’s financial inclusion agenda through fintech.
The rise of fintech incubation and accelerator programmes in banks and financial institutions
It is evident that banks and financial institutions around the world have realised the advantage of collaborating with fintechs, which offer expertise and agility. We now witness banks and other financial institutions developing accelerator programs and innovation labs to foster talent in the fintech space.
Bank-fintech partnerships have emerged as a beneficial path of growth for both sides. For traditional financial institutions (banks), working with fintech startups enables them to integrate technologies for customers without having to build solutions from scratch. For fintechs, collaboration means access to a broader range of customers in a well-established industry with deep pockets – this is where banks’ innovation programs and accelerators come into play.
Accelerator programs facilitate the development of projects by providing startups with the necessary tools to establish strong value propositions. Accelerators give startups the best chance of achieving external funding and business growth in a span of 12–18 months.
Innovation labs focus on the very specific innovation requirements of the particular host organisation.
This panel will outline how collaboration between banks and fintech startups works in major financial hubs around the world and will report on what is happening with bank-fintech partnerships. It will also explore ideas for how this type of collaboration will serve the future of the banking and startup ecosystem.
Involving angel investors in the financial road map of fintech startups
David S. Rose, founder of New York Angels, an early-stage technology investment group, pointed out that angel investment can be extraordinarily lucrative. When Bill Silberman approached New York Angels in April 2009 seeking a small investment in his interactive mobile cataloguing idea, he valued his company at 2.5 million USD. In 2013, just over four years later, Pinterest is valued at 3.8 billion USD – an increase of 152,000%. So angel investors who backed the initial funding round have done extremely well. In 2015 Pinterest raised 367 million USD, giving the online site a valuation of 11 billion USD, making it one of the world’s most highly valued startups.
One recent survey of angel investors published in the UK shows that financial technology came out on top, with fintech as the most lucrative area for angel investment. It delivered higher growth than any other industry.
This panel will discuss how you can get involved as an angel investor in the financial road map of fintech startups, how to invest in fintechs, what sort of background you or your co-investor should have as a fintech angel investor, and the nature of the fintech startup portfolio you should develop for a better return of investment.
Angel advice: Funding your fintech business with smart and patient finance solutions
The world of entrepreneurial startups is where the most exciting and creative action is happening in today’s business world. With angel investing entering the mainstream, more than USD 50 billion is being invested annually worldwide.
An angel investor is a private individual, generally with business experience and high net worth, who directly invests part of their personal assets in new and growing unquoted businesses. They might invest individually or, alternatively, invest in syndicates where one angel in the syndicate typically takes a lead role. Good angel investors can provide ‘smart and patient capital’.
Business angel investors usually provide smaller amounts of finance (USD 25,000 to USD 500,000) at an earlier stage than many venture capital funds are prepared to invest. They are increasingly investing alongside seed venture capital funds.
Most angels contribute much more than pure cash – they often have industry knowledge, management experience, and contacts that they pass on to entrepreneurs. Angels will often take non-executive board positions in the companies in which they invest.
The importance of business angels in the equity capital industry has grown significantly in recent years and are becoming increasingly important to the global equity capital industry.
This panel will offer valuable advice to startups who want to raise ‘smart and patient capital’ from angel investors on how to develop a business model that will convince angel investors to invest in their fintech businesses. The discussants will also show a clear road map for securing finance from angel investorsand for making a successful exit at the optimum time.
By working together across borders, with a common vision, and with these smart dynamics in mind, we are well placed to bring about positive change in the global economy
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