Moving Fintech Forward: With Carta Worldwide, Ageras, Plaid and IDA Ireland
Fintech is at an inflection point amid rumblings that the industry is “losing its luster”. We have seen companies struggling to raise new funds, reports of falling valuations, fire sales, layoffs and hiring freezes. Some fintechs have closed abruptly, while others have said goodbye before they’ve even had a chance to say hello.
Throughout January Fintech Times, we’ve asked industry experts to share how we can move “fintech forward” over the next 12 months.
Today we share the views of Carta Worldwide, Ageras, IDA Ireland, Earnest and Plaid.
We need a “step change in regulation”
The massive layoffs seen in recent months are likely to continue into 2023, but out of the ashes of 2022, expect to see the return of fintech, says Richard WrayChief Operations Officer, at Paytech, Map of the whole world.
“Fintech has always had disruption at its core and is known for moving quickly, and occasionally breaking things. In stark contrast, regulation has largely been cautious, slow and unable to match the relentless pace of fintech innovation.
This has created problems – from a runaway BNPL market to buyers overcharging merchants and crypto firms going under and losing customers’ money. For fintech not to skip a beat, we need to see a step change in regulation in 2023, including new consumer credit rules across Europe to cover BNPL, PSR stepping in to protect sellers, and MiCA to regulate crypto assets.
“Fintechs, previously resistant to more regulation, are now demanding rules to bring stability and order to a market that has faced a year of uncertainty and upheaval.”
“We must innovate to help people more”
Ripsy Bandourian, leader of Europe for Plaidsays that there must be greater pressure for innovation.
“The fintech the sector has come a long way in recent years, with millions of customers worldwide educating themselves on new processes, apps and services available, including open banking. However, there is a sector-wide need to further embrace this, push the boundaries of innovation we have not yet imagined, and help consumers in a time of need.
“While many people across the UK and Europe may be turning to a ‘back to basics’ approach to finance, that does not mean they are abandoning digital tools. There is a huge opportunity for fintech companies to innovate as more and more people report fintech creates real benefits in their financial lives.
– To enable continued growth, further development will be required – and a large part of that lies in moving regulation from open banking to open finance. Open finance has the power to give consumers a holistic view of their finances, by opening up data on mortgages, investments and pensions.
“Without permission for these datasets, there’s only so much fintech companies can create to help people manage their money. More access to more types of data means more innovation, and we hope regulators can see that and develop guidelines soon.”
“We must add value”
Martin Hegelund, CMO and co-founder of fintech ages, says that as an industry we need to focus on applying our focus and investment to truly beneficial and value-adding products that can be monetized with a viable business model.
“As fintech valuations take a bigger hit compared to any other sector in the current economic downturn, the industry will need to maintain its emphasis on real use cases with a proven track record to be profitable.
“Speculative solutions that do not make money or provide adequate returns are likely to meet the end of the road. Customers and investors should focus on tools that save time, costs and/or enhance revenue.”
“We need to work together more”
IDA Ireland
Companies will look for a critical mass of expertise via the ‘cluster’ concept, says David GaskinVP and Head of Financial Services, Western US, IDA Ireland – the Irish government’s economic development agency responsible for attracting foreign direct investment to Ireland.
“A powerful approach to driving innovation forward that is common in Europe but not so in America is clusters. The cluster concept is a collaboration between businesses, government organizations, universities and research centers. Clusters usually occur in a geographic area where participants can direct their energies to specific technologies.
“In the fintech sector, clusters often focus on AI, blockchain, cybersecurity and machine learning, but the overall idea is the development of regional ecosystems for related industries and skills with a wide range of inter-industry dependencies.
“An economic phenomenon. Clusters also create a concentration of skilled workers who are attracted to the critical mass of coordinated units with a common goal. To move the fintech industry forward, we need to collaborate and come together to innovate and thrive.”
“We must stop thinking in silos”
“Fintech is an interesting industry with great momentum, but we will create real change only when we stop thinking in silos,” says David Greenmanaging director of fintech Serious.
“I’m excited to see what 2023 brings in terms of unexpected collaborations across industries that incorporate fintech, and to see new ways to bring financial services to products or companies people are already familiar with.
“I hope through this, consumers can access personal finance in a way that helps them understand how to set themselves up for financial success. Ultimately, a product where form meets function is a great product!”
