MWC2018 on FinTech: big picture still missing

FinTech is not the focus of MWC, but nowadays FinTech is somehow linked to many services, and definitely finance is entering mobile. In that way it is somehow surprising that FinTech hasn’t a more prominent role at MWC. There are components that help with FinTech on show, but a larger understanding and ecosystem point of view are missing.

Blockchain is a newcomer also at MWC. There seems to be a wild variety of scenarios where blockhain is planned to be utilized. Some companies have started to offer blockchain-as-a-service, some focus on managing ID or wallets with blockchain, and then there are models outside core finance services for smart contracts and data sharing. But as it is also with banks, not too many corporation executives know, what they mean, when they say they want to be active in blockchain.

Identification, KYC, mobile payments and wallets and money transfers are maybe the most typical FinTech services at MWC2018. All these components are relevant and they are needed in digital finance services. The surprising fact is that not so many of these providers have really thought, how their components are linked to other services and support a larger ecosystem to work smoothly. For example, mobile identification and payment services offer mainly their solutions for telcos and banks, but it sounds like they haven’t e.g. thought, how components of identification, KYC, AML, payment processing and wallets are linked to each other, data should be exchanged between them and you need all of them to offer secure regulated services.

Cashless has been the topic of several discussions. The conversation is not yet really about crypto currencies, but how to pay without cash. The market is quite divided, when the emerging markets are coming to cashless mobile payments, because they have no existing banking infrastructure, and the most developed countries (e.g. in Sweden and Canada over 70% of transactions are cashless) go to cashless thanks to their advanced infrastructure.

There were some interesting examples of how the cashless reality is built especially based on good usability and attractive services. Fenix International is a new kind of electricity company. It offers solutions such as the ability to manually or solar charge mobile phones and improve lighting in Africa. Mobile money and payments become important for them for offering use-based payment model for their products and services. They have expanded their offering to provide finance for paying school fees. In that way they develop financial inclusion and when they also collect data from customers, it helps them to evaluate credit ratings and offer more loans.

Transport for London, TfL, was another case talking about cashless payments at MWC2018. Their case is very different from Fenix, in a very advanced finance market. They started with their Oyster touch card payments almost 15 years ago, and nowadays they support payments with many debit and credit cards (that have a touch payment chip) and also with mobile payments, like Apple Pay. Many cities have proprietary payment solutions and cards for public transportation, but London’s case is important, how people can use their existing cards and payments solutions also with public transportation. Why would expensive proprietary solutions anymore make sense?

Regulation and compliance are always important parts of finance services, including payments. For example, you need to have KYC, if you really want to build a sustainable service, although one speaker made a good point “if you are really worried about KYC and AML, maybe then it would be better to focus first on Swiss banks than micro-payments in Africa.” It is important the regulators don’t make new important services too complex to implement.

One important aspect in a cashless panel was user experience, especially how to decrease fear and increase confidence in the use of new payment services. Many people are still worried, if new payment solutions are accepted, if they are secure and how they should really use them. This is linked to UX design of the services, but it is also important for service providers to provide more information to users.

Some experts made predictions that there could be a war between banks and telcos in the finance market. Telcos have a role to play in some finance services especially in developing countries. Typically, this is limited to payments and money transfers, and often these services are also implemented by a third party service provider. I have seen these predictions also earlier, and I still have a hard time believing them. As a whole banks offer a lot of services, and there will be many companies that challenge them with different services. The core banking services also require significant capital. Telcos have never been good to offer anything other than connectivity services to customers. Online and mobile services will change finance, but probably telco carriers’ role will be small in that disruption.

We can still say, as I have said earlier years too, that FinTech is component, not ecosystem, oriented at MWC. It is somehow surprising, when the finance system and new finance services are a huge new business and opportunity in mobile and all networks. There are lot of companies that offer advertising solutions at MWC, but actually finance services are often easier to make money with, because money is always a part of services in finance. Maybe in the next year we see FinTech has one focus area of MWC with a bigger picture emphasis on services and ecosystem.