Fintech Nexus completed its metamorphosis. In 2022, the show launched its transition from LendIt into a namesake focused on industry connections. The two-day show remained in New York, gathering a good crowd of fintechs, venture capitalists, banks, credit unions, media and influencers. While there were still strong lending echoes from the vendors in the exhibit hall, the agenda this year was balanced with a wider focus on payments, embedded banking, security, consumer data and more.
A dominant trend on the floor was alternative credit modeling. Many fintechs launched over the last several years to help find the good borrowers in the 30%+ of Americans being turned down due to insufficient FICO scores. Some had stronger messages than others; the competition in this space will force vendors to strengthen their business cases around how bankers can do well by doing good and being more financially inclusive. There were also new products introduced to give consumers more control over their data - allowing them to provide more access to lenders in hopes of more favorable decisions. Both trends are strong advances for our industry and financial health.
A banker commented from a keynote that to prepare for the future, bankers should attend shows like Fintech Nexus and keep a pulse on what’s available in the marketplace. She challenged peers to think openly and read between the lines about how their bank can apply the solutions they see to their unique business cases. I completely agree, but I’d also like to challenge fintechs to make this easier on bankers. Depending on your business, messaging may need to pivot as the economy changes. For instance, many security and KYC/KYB vendors were often focused on loan account openings in their introductions, but these solutions can also be very important for gathering deposits, which was conspicuously missing from the conversation. Some may choose to focus on growth and portfolio strategies in general, which includes deposits, payments and lending.
Another shift is in go-to-market strategies - fintechs finally want to help bankers modernize by working with their existing IT infrastructure. Fintechs are under pressure to perform and show growth and results in this economy, so they are helping banks get to their ROI as quickly as possible. This will accelerate innovation in banking. As one fintech friend commented to me, “We used to be disruptors. Now we are innovators.” The difference is important. As we move forward, fintechs are cooperating with peers, building with open strategies and working in unity for a better future. This long-term vision will help build resilience and maximize results in the years to come. It’s an exciting time.
Reminder: keep up with the times
What may have been a highly successful selling point in January could be completely different in today’s environment. As a quick test, ask yourself:
- Are my competitive differentiators clear?
- Is my message still receiving the same interested reaction as it was in 2022?
- Do I have an elevator speech that works for all my audiences and decision makers?
- Do I have clear use cases that focus on the problem(s) solved, not the technology?
(Think: Am I offering a mortgage or helping you buy a home? No one wants a mortgage; they want to own a home.)
Bankers will keep a strong focus on safety and soundness during these times. It’s more important than ever to differentiate results-driven technology innovations from over-hyped trends.