Money 20/20 Europe: Fintech thriving despite harsh conditions

The takeaways were that blockchain had already proved its utility and AI would soon be maximized.

Several speakers noted challenging macro conditions but had a positive outlook for fintech and embedded finance. A packed out auditorium listened to HSBC CEO Ian Stuart talk about the SVB buyout and why HSBC acted so fast. He also spoke of feeling the need to support the UK’s startups.

“The macro-environment in 2023 is going to be difficult,” Stuart said. “In late the 2024 market will come back. This isn’t new, this happens all the time across the markets. Inflation is a problem. Rates will come down, but not as quick as people think. Innovation will play a really important role. Rates might peak by early Q3. The minute inflation is under control, people will want growth.”

“Relationship managers are gold dust. I want them freed up to be out there dealing with customers. Let machines do the ordinary and humans do the extraordinary.”

Ian Stuart, CEO, HSBC

ChatGPT was a buzz term at the event, leading to multiple discussions about the impact of AI on banking and fintech. “If we can take manual work out of banking, we can free up human capital to work on exciting things. In the UK we have 750,000 business accounts, of which about 400,000 will need an annual review. Relationship managers are gold dust. I want them freed up to be out there dealing with customers. Let machines do the ordinary and humans do the extraordinary,” Stuart said.

The previous year’s buzz term, blockchain, was also mentioned. Stuart said: “In trade finance, only a few years ago, it hadn’t moved since the 1970s. It was terrible, paper everywhere. Blockchain has really helped with that. Open banking is now everywhere, and next it’s digital currencies. And we would not be where we are without the challenger banks – they gave us a massive wakeup call.”

Optimism for embedded finance

Speaking to a senior reporter from TechCrunch, Airwallex CEO Jack Zhang said: “I share the same concern and frustration seen across the industry. There’s been pretty bad macro [conditions] in the last 18 months and I don’t see anything improving in the next 12 or 18 months. Deposits have been declining due to inflation. But beyond the next two or three years, in say 10 or 15 years, healthcare and banking are the two least disrupted industries by technology.

“There’s so much happening in technology that can fundamentally change that landscape. There will be more than a dozen fintech winners improving financial inclusion and embedded finance will continue to thrive”.

But he criticized the role of global regulators in hampering advancement: “Open banking is very advanced in the UK, US, and Europe. I’ve heard a lot of people at this conference complain about the FCA. But the FCA is one of the best regulators if you deal with regulators globally. The foundation in the UK is a lot better, while other regions are playing catch-up.”