From fintech and lending to networking and pub crawls – The LendIt Europe 2018 experience

The fifth annual LendIt Fintech Europe brought a flurry of excitement to London on on 19-20 November, with more than 1,200 fintech companies, banks and investors from Europe’s most influential companies present at the Business Design Centre. The goal - to network and discuss on subjects such as lending and fintech, the increasing number of bank-platform partnerships, digital transformation, lending innovation, financial inclusion, digital banking, blockchain and artificial intelligence, regulatory innovation and identity before coming on to the much debated topic of open banking.

Other topics included the rise of blockchain technology in financial services, trends in digital identity and anti-fraud, the latest in data analytics, as well as the evolving regulatory environment in Europe.

We are very pleased and honored to have met and listened to experts from companies including Tieto, Jumio, IdentityMind, Mash, Lemon Way, Five Degrees, Emailage, Comply Advantage, Equiniti KYC Solutions, CashFlows, Afluenta, Monobank and many more.

For those not familiar with LendIt Fintech, this is the World’s Leading Event in Financial Services Innovation. LendIt Fintech hosts three annual conferences, LendIt Fintech USA, LendIt Fintech Europe, and LendIt Fintech China, and dozens of complementary online and in-person industry events. These events bring together every major fintech, blockchain, lending and digital banking companies from around the world. LendIt also owns and operates one of the world’s leading industry educational channels, Lend Academy.

Highlights from the many keynotes at LendIt Europe 2018

International expansion

A topic on everyone’s mind. Luckily for the attendees, a panel of experts from lending platforms and companies shared their specialist advice on how to enter new markets around the world. The panel included peer-to-peer lending marketplace Funding Circle’s chief strategy officer Lisa Jacobs, founder and CEO of SME lender Spotcap Jens Woloszczak, consumer credit company Younited Credit’s CEO Charles Egly, Latin American fintech company Alfuenta founder Alejandro Cosentino and European SME loan platform October COO Patrick de Nonneville.

They discussed the importance of knowing your market, understanding the local culture and effectively navigating regulation, while also pinpointing the necessity to build a network of local experts on the ground who can feed you information about what the market is like before you go there. They continued with best practices such as: work out your distribution networks, diversify your business model, frame your thinking very specifically to the market you’re looking at and make sure it’s completely in line with the regulation finding the right team to handle the expansion.

Are marketplaces the future of banking?

We all know what a marketplace is, yet for financial services it’s more than just a place to find shoes.  From a bank’s perspective it is the main driver for competition, as it works as an aggregator of products and services with similar offers and characteristics, presented to the customer in a set of competing offers. Aside from offering consumers transparency, choice and better pricing, it also sets the trends for the competition – if a product sells or performs well, the competition will seek to reach that part of the market for the same share of success, or even outwit the product and its producer, together with the offer that, up until then, capitalized the market.

For challenger banks and new entrants to the financial services sector, the marketplace offers possibly the best chance of a level playing field. Starling and Monzo, for instance, have announced partnerships with third-party providers to present the range of services available to their customers. They follow earlier adopters including Revolut, N26 and Fidor, all of whom already partner with other companies to gain faster access to a wider product portfolio.

However, is the marketplace model sustainable in the long-term? Is the marketplace the future of banking? In this session led by Victoria Bateman, Director for the EMEA region of RFi Group, panelists - Nigel Verdon of Railsbank, George Chesakov from Tinkoff Bank and Chad West from Revolut - discussed the future of banking and the role that various marketplaces might play as new varieties of lenders emerge. Watch this space.

Is regulation an enabler or inhibitor of innovation? 

Apparently both. Regulation had — and continues to have — a huge impact on payments innovation around the world. Regulators and financial institutions both have a need to cultivate innovation, something that countries around the world are in dire need of, as more and more international companies make the foray into fintech. In this session lead by moderator Emily Reid, Partner at Hogan Lovells, panelists discussed the regulatory compliance and how it can be both a hindrance and a proponent for innovation in fintech and for financial institutions.

Banks and P2P lending platforms – love or hate?

The event has reminded us of the crucial role performed by banks when it comes to lending. However, P2P lending has forced banks to look at their business model and adapt to a new online world. And there are many ways that banks are involved in P2P lending today, as follows:

Investing in the loans: meaning banks investing in the loans of P2P lending platforms.

Equity investing: many banks - such as Barclays, Santander, and Citi - have made equity investments in platforms. Ian Rand of Barclays Business Bank and Anil Stocker from MarketInvoice sat for an interview with Ed Robinson from Bloomberg News to talk through their recent partnership and how they are teaming up to help UK small businesses get the funding they need. While multiple banks have made equity and wholesale investments in P2P platforms over recent years, the Barclays-Market Invoice collaboration, where a high-street bank extends a fintech’s offering to its own business banking customers, is a global first.

Lending-as-a-service: P2P lending platforms powering the online loan operations of banks while giving them a new way to obtain customers.

Acquisitions: some banks have acquired online lending platforms as they look to create their own online loan origination engine.

Build their own platform: some banks have built their own platform for lending (banks such as Goldman Sachs, RBS or Barclays).

But whats an event without Open Banking?

Everyone talks about the ecosystem of financial services choice: personal financial management offerings, new products, peer-to-peer lending, cryptocurrencies, innovation, marketplaces — the reality is the vast majority of people just want simpler better banking services they understand. When it comes to open banking, Shefali Roy from TrueLayer said that banks should have communicated with their customers more thoroughly regarding the open banking initiative, as most of the them have not heard of or are unsure of what open banking is as a concept. 

What is more, Helene Panzarino from SBC Collab Fintech added that open banking has so far fallen short of delivering the promised financial revolution. Also, the introduction of open banking failed to incresea trust in financial services.

On the other hand, this 2018 launch of open banking was just the beginning of the revolution, according to EY’s Imran Gulamhuseinwala, who reminded those present at the event that the process, which was mapped out intentionally over 18 months, is something unprecedented, yet successfully attempted by the UK. The “starting gun” as Gulamhuseinwala refers to, is just the kick-start of a collaborative approach in the banking industry.

However, not everyone agrees to the success of the ambitious attempt. The TrueLayer representative pointed out the slow pace of the banks implementing APIs process, which not always resulted in the best quality results, prompting both speakers to agree that, since compliance is usually the best funded department in a bank, the institutions have afforded to push forward to the open banking initiatives.

Amid scepticism towards challengers, Tim Sievers from Deposit Solutions added that customers will continue to trust and continue the relationship they have with their banks, thus pointing out that, despite all innovation and evolution, the incumbents will not be losing any ground.

One thing is for sure - open banking is coming, but it’s just taking its time.

Not just panels and keynotes

There was more to the event than just the discussions and keynotes – Lendit had an expo floor with many companies exhibiting their products and networking was made easy using Brella, the networking app, which enables attendees to connect and chat during the time of the event.

What is an event without a competition? This year, LendIt hosted the annual PitchIt @ Lendit, where 8 entrepreneurs had the chance to make a business pitch in front of a room full of investors to bring their ideas to fruition, with Innovative Assessments, a company doing credit scoring based on good character, as the winner of the competition. Very “Shark Tank”, isn’t it?

In true London spirit, the team at Lendit invited everyone to a pint or two and experience the area’s top pubs as part of the event’s inaugural pub crawl. And, as a true supporter of bridging the gender gap and supporting the women in the industry, LendIt has organized a night out for the women in fintech to enable them to connect and share ideas and experience as members of the community.

About Oana Ifrim

Oana Ifrim is Senior Editor at The Paypers and explores topics spanning B2B payments, supply chain finance, e-invoicing and related subjects and topics. She is a passionate observer of banking innovation, with a penchant for fintech - always keen to identify and understand how new technologies and digital strategies and solutions are shaping the future of banking. Oana holds a Master’s degree in American Studies.