Glenbrook's Bryan Derman filed the following report tonight from today's Finovate 1.0 Conference in New York City.
I had the pleasure of attending today’s Finovate 2007 conference in New York, the inaugural edition of what we hope will be a long stream of such gatherings to highlight new offerings from many of the most forward-thinking companies in financial services. Jim Bruene and the team from Online Banking Report made an impressive debut in their first foray into the conference business.
The show was as innovative in its format as it was in its content. Forgoing the usual regimen of keynote speeches and moderated panels, the organizers gave each of the 20 presenting companies seven minutes to demonstrate their latest wares for the audience (200 people in the main room, with an overflow crowd watching on TV nearby).
Presentations by groups of 10 companies were followed by ample time in an exhibit hall for additional demos and extensive Q&A. Hardly a PowerPoint slide was used all day long, and I don’t think anyone was left disappointed.
I won’t try to review all the presentations, as the OBR team seems to be capturing the key details of each demo on their blog (www.netbanker.com), but I did distill a few themes that were prevalent across several of the presentations.
- PFM Goes 2.0. A number of presenters appeared to be competing for the mantle of “Quicken for the rest of us”. Web-based versions of personal financial management (PFM) applications were on display from upstarts like Geezeo, Jwaala, and Mint as well as stalwarts like Yodlee and Digital Insight (Intuit). These services are usually offered through online banking applications and promise greater ease of use and more accurate spending categorization than the traditional PFM software packages. Many also employ algorithms to help the user identify opportunities to save money by avoiding fees, reducing interest charges, or other means. The technology advances in this space are impressive, and we have often criticized banks for ceding the PFM market to software companies, but I continue to wonder how large is the segment of consumers that really wants to understand its money this well.
- More Online Services for Banks. In addition to PFM functionality, several vendors brought forward new services for banks. Metavante demonstrated its expedited payment functionality, while CheckFree showed its enhanced user interface and deep integration with recently-acquired Corillian, and Online Resources displayed its Virtual Collection Agent to automate collections. Andera offers automated assistance with online accounting opening and Identity Theft 911 allows banks and other institutions to offer high quality, one-to-one ID theft resolution services to their customers.
- Power to the People. By contrast, a group of presenters brought forward consumer-facing applications, some of which could be viewed as threatening to banks. Prosper demonstrated enhanced tools to help its lenders make better risk assessments, while Lending Club showed the peer-to-peer lending solution that it debuted earlier this year on Facebook. Mortgagebot has leveraged its relationship with 700+ mortgage lenders to create Mortgage Marvel, a mortgage product and price search engine for consumers. Finally, Billeo, while also working with banks, demonstrated its toolbar which allows consumers to manage biller direct sites and payment instruments without sharing data beyond their own hard drives.
- Go Mobile or Go Home. Much of the afternoon session was given over to what one participant called a session of “mobile banking speed dating”. Five leading mobile banking/mobile payments companies (Firethorn, Monitise, ClairMail, MShift, and mFoundry) presented their solutions consecutively, leaving a trail of SMS, mobile web, and native applications in their wakes. It’s too early to try to pick the winners here, but there does seem to be a growing sense of inevitability about the deployment of mobile functionality by banks across the world. Functionality beyond traditional online banking transactions are emerging (geo-location services, bank-sponsored ads), but I would like to see some greater level discussion of the consumer segments to be targeted and the elements of the bank business case for investment (beyond competitive necessity).
All in all, a day well-spent. It’s great to see in one room the high level of innovation ongoing in the financial services and payment space and again we thank the Online Banking Report for bringing it to us in such an efficient and engaging format. I can’t wait for Finovate 2008!