Key Trends at Money20/20: Digital Identity and Mobile Data Security
The importance of securing mobile applications, digitalizing identities and accurate user identification.
At the recent Money20/20 event in Copenhagen, many of the world’s leading Fintech innovators and thought leaders came together to exchange insights and observations. Again and again it illustrated the importance of many of the key challenges that G+D Mobile Security have been developing solutions for in digital identity and security. In keynote after keynote, different speakers identified the key trends facing the financial services industry, and the opportunities available for those willing to deliver effective, robust solutions. Will Gaybrick, the Chief Finance Officer of Stripe, explained, “[We are facing] an identity crisis of money on the internet”. As mobile devices are used for more and more transactions, security and authenticated identities will gain importance. We spoke to a number of key speakers at the event to assess what they felt were the key trends to be aware of in mobile banking innovation and data security as we become increasingly interconnected.
Trend #1: PSD2 will drive innovation
JP Nicholls, a leading financial commentator, who was conducting a series of interviews with thought leaders for the globally followed Breaking Banks podcast, declared that “PSD2 was easily the hottest buzzword at Money 20÷20”. PSD stands for Payments Services Directive, and it will lead to major changes in EU banking. This will allow 3rd parties to get access to selected customers’ data today privy to the bank. When banks open up their data systems via APIs, it will offer great opportunities for both banks and new players such as Fintechs. It is a big challenge and a game changer for those who are able to provide secure mobile solutions. JP Nicols further explained: “APIs and Open Banking are not exactly cutting‐edge topics at this point, but they have moved past the hype and into production in Europe, thanks to PSD2, and the rest of the world is paying close attention.” This enforced change due to regulatory impetus will mean that Europe will be the testing ground for many new solutions and technologies, which could then subsequently go on to reach global markets.
Trend #2: GDPR will ensure Europe’s future as a global mobile data innovator
The combined impetus of PSD2 and the GDPR initiative coming into effect in the near future in Europe will ensure many European banks and other companies are forced to change how they do business. A recent study by Marsh concluded: “Firms could gain a competitive advantage by developing their cyber security and information management systems around the requirements of the EU’s new data protection framework, the General Data Protection Regulation (GDPR).” In doing so this will also bring them great competitive advantages over other global markets, where technological innovation in financial payments is moving at a much slower rate.
PSD2 was easily the hottest buzzword at Money 20/20
– JP Nicholls, financial commentator
Trend #3: The importance of watching Asian payment innovations, and the importance of micropayment opportunities
Susanne Chisti, CEO of the FintechCircle, feels that Asia is an important part of the world to be watching. “One of my biggest take‐aways was the impressive growth of Chinese fintech, driven by tech giants such as Baidu, Tencent and Alibaba, and how they managed to adapt their data‐driven business models to provide financial services at scale and at low costs to billions of people across China/Asia.” As well as in China, Chisti also noted interesting innovations to watch in Singapore that “help the unbanked [and] showed that regulatory leaders have recognized the power of fintech to make our world a better place for the 2.5 billion people who are currently excluded from the financial system.” Micropayments and evolving solutions for these type of transactions offer another great opportunity for those that can provide effective secure mobile solutions. A number of startups at the event were looking to solve the challenge of micropayments. These will offer the ability to reach people who are “off the grid”: the underbanked and self‐employed, working with these more marginal people and zero hour contract workers, in the gig economy, at Uber, the so‐called new self‐employed. Smart! autor Caroline Bowler saw the rise of the underdog, both at the individual, company and country level, as something to watch too. “Relatively small nations such as Singapore, Ireland, and Denmark [are] all punching above their weight on the global fintech stage”.
2.5 billion people are currently excluded from the financial system.
– Susanne Chisti, CEO of the FintechCircle
Biometrics, automation and artificial intelligence for a better customer experience
As well as the three trends highlighted above, we are also seeing rapid innovation in a range of other areas that will change our user experience as a customer in the future. Already improved customer experience is a strong driver of innovation, especially if it results in something positive and effective in one service, which you then expect in other areas of your daily life too. Biometrics is progressing rapidly to help combat fraud, enabling strong authentication and potentially reduced misuse of funds by unauthorised users. Artificial intelligence and automation are also developing rapidly and offer great possibilities for fraud management.
Great opportunities for European companies
Europe is changing significantly and might with this move shape digital banking and payments in other parts of the world. This will change business models of financial institutions as well as attract new service providers. In a symbiosis, this could fundamentally change the way digital banking and payments are done and strenghten consumer focus.
Below are some interesting tweets and images from the event.
— Antonio Vieira Santos 🙋🏽♂️ #YourExpert (@akwyz) June 27, 2017
— Megan (@MeganCaywood) June 27, 2017
— Claire Scholz (@jcscholz9) July 6, 2017
— Lukas Zoerner (@LCZoerner) June 28, 2017