On April 3, members of Shearman & Sterling’s Fintech Foundry attended the 2019 Empire FinTech Conference in New York City. The event featured panels on a variety of topics relevant to the FinTech ecosystem, including payments, incubators and AI, among many others. The conference also hosted several demos from FinTech companies, held fireside chats with FinTech entrepreneurs and provided insights into trends to be watched throughout the year.
Here are the 5 main takeaways from the conference:
Ethics & data protection are taking on a prominent role in the FinTech space.
As the FinTech industry has evolved, ethics have not just become a priority for firms, but also a competitive advantage. Building strong data protection and cybersecurity infrastructures is now a way that firms can separate themselves from their competition, and some firms have even started tying incentives and compensation to senior-level management based on their cybersecurity and ethics performance.
Incubator programs remain an effective tool for FinTechs.
Incubator programs, both at financial institutions and other accelerators, continue to be a valuable way for FinTechs to develop relationships in relevant industries and conduct live testing. While far from the only avenue for FinTechs to develop their products, these programs allow FinTechs the opportunity to gain validity by being associated with a financial institution or other respected organization, while also providing them with enough space for creativity.
It takes more than a great product for a FinTech to succeed.
Beyond developing a strong and appealing product, FinTech entrepreneurs must also determine how to sell the product in a cost-efficient manner, market the product effectively and ensure they are following relevant laws and regulations. They must also strategically determine their first line of customers: for example, would the product be better geared towards millennials, or should the product target baby boomers instead?
Open banking continues to be a hot topic.
Open banking was generally looked upon favorably as a way to empower innovation in the FinTech space and allow other financial services firms to grow. However, it remains to be seen whether financial institutions will be able to use this to their advantage in order to collaborate with FinTechs and provide additional benefits for consumers, or if this could result in them losing market share to FinTechs in the long-run.
FinTechs must remain agile.
FinTechs must be bold in their areas of focus, but they must also know when it is time to give-up on a certain project and when to pivot. Adapting is key for a FinTech’s success, and FinTechs must also make sure that their offered product is addressing key pain points and industry needs while ensuring that this is clearly articulated to the industry and investors. Additionally, they should seek guidance and intelligence from trusted advisors with experience in the industry they are trying to break into.
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