Collaboration in Fintech: Fusing Industry Knowledge With Innovative Thinking
Last Friday, we hosted a fintech event in our hometown of Charlotte, NC, the latest in a series we’re calling LevvelUp. We started LevvelUp as a way to bring clients, partners, and colleagues together to share vital information with each other and with others in the community. Each of these events focuses on a specific topic or theme; all of them provide startups with insights from global leaders and in turn expose Fortune 100 companies to innovative startups that are challenging traditional ways of doing business.
The speakers for last week’s event, which focused on partnerships in fintech and the future of payments, included Jim McCarthy, Global Head of Innovation and Partnerships at Visa; David Godsman, Head of Emerging Payments and Commerce at Bank of America; and Tom Noyes, CEO of Commerce Signals. Given the theme and the caliber of speakers, it’s no surprise that the afternoon was full of insight—for traditional players and startups alike.
Over the course of the conversation, three key themes emerged: banks and networks are ready and eager to partner with startups, working with a bank can be really hard, and payments are coming to every device imaginable.
Banks and Networks Are Eager to Partner
Just a few short years ago, most banks and traditional payments players viewed the wave of fintech disruptors as a threat, often taking a very defensive posture towards them. The last 18 months have seen a dramatic shift in that positioning; banks and networks now view startups much more openly. McCarthy used the phrase “open for business” to describe how Visa now partners with outside companies to build new technology and enhance the customer experience. Sometimes this partnership comes in the form of investment. Sometimes it means making it easier to work with the bank or network by reducing traditional vendor requirements. Other times, it just means just engaging with them more openly to help guide product decisions.
Working With a Bank Can Be Hard
Many of us at Levvel came from banks and other large financial institutions, and so we often advise startups on how to overcome the difficulties that arise when working with one. Insurance requirements, indemnification and IP agreements, capital requirements, physical security requirements—these are just a few of the unexpected constraints a fintech startup will inevitably encounter. Such challenges came up frequently during the discussion, and the panel offered helpful guidance on these as well.
Noyes suggested that startups find a guide within the bank to help them navigate industry requirements and develop an informed, actionable plan. Godsman echoed his point, saying that innovators need to move past envisioning their ideas to figuring out how they can execute them given the constraints of the real world. McCarthy shared how Visa is trying to meet startups where they are, doing things like shielding vendors from traditional, early stage requirements in order to make room for innovation. It was clear from the conversation that both banks and networks will need to continue to adjust their existing engagement model to support the early stage companies with whom they want to work.
The Payments Are Coming…To Every Device You Own
To highlight the proliferation of payment devices, McCarthy showed the audience his payment ring, his payment watch, and nine or ten other devices that he had in his pockets. While obviously an extreme example, it did illustrate how payments is evolving from something you do at a store to something that happens—frequently—as you interact with the world. It also opened the door to a discussion around the need for a new way of thinking about everything related to payments, from payment device certification to how banks distribute digital versions of cards to IoT devices. One thing is certain: the way we define a ‘payment device’ is changing very quickly.
We hope attendees found the LevvelUp event informational and fun, regardless of their role in the payments community. At the very least, we hope they enjoyed a drink or two on us.
If you were in attendance, feel free to share your thoughts on what you found to be most useful. Whether you were able to attend this session or not, let us know what other topics you’d like us to cover in future LevvelUp events.
Photo courtesy of the Charlotte Business Journal.