Thoughts from Finovate Fall 2011

I have attended for the first time a Finovate event this past week in New York. A very successful event, it was attended by hundreds of people from the financial services industry, and I’ve seen a lot of interest in listening to presentations from over 60 startups attempting to change the way people interact with financial institutions.

The essence of what I’ve seen and experienced:

1. Financial services on the phone are everywhere – almost half of the companies presenting do something that takes advantage of smartphone features, primarily the customer location. The amount of functions that people are creating is impressive, and we are still just touching the surface of what is possible.

2. Social networks are definitely a new playground for financial services startups, and they are moving way beyond placing ads in Facebook – from providing banking services in social network apps, to taking advantage of the improved level of trust and customer knowledge provided by the extra data mined from social computing interactions.

3. Almost 1000 attendees, mostly from banks, tells me, again, that many in the financial services business understand that innovation is the way forward, and the “bank of the future” has to innovate to survive. It is also clear that the days of internal captive R&D; are gone, that most companies have embraced open innovation, and have  few to no problems working with early stage startups.

4. There is still room to innovate in traditional services – better plastic cards, payment engines, credit scoring, online banking interfaces. It was good to see an almost 50/50 split between attempts to provide radical change, and sound incremental improvements.

5. I was pleasantly surprised to see quite a few companies providing financial education sites – for children, for families, for women, etc. The events from 2008 onwards have highlighted the need for people to be better informed and knowledgeable about their financial well-being, and the show demonstrated that innovation is not only about new gadgets.

The list of best innovations and companies, as selected by participants, is here.

Unfortunately, only a few of the companies at Finovate have technologies or services applicable and/or usable in Russia (my focus), or anywhere outside North America for that matter. Different online habits, smartphone popularity, cultural and language barriers, and so on. Fortunately, I have discovered several companies that may be part of our future technology innovation plans at Sberbank…