This week was New York FinTech Week, bringing together hundreds of professionals from across the sector for a series of panel discussions, roundtables and networking events. From technology and innovation to regulation and legislation, the industry’s top minds discussed the emerging trends and business issues impacting the sector. Our FinTech Foundry team was on the ground for the entire week, and in case you missed it, we captured some of the week’s top moments and insights.
The Future of Crypto
At Tuesday's Empire FinTech Conference, Shearman & Sterling partner Donna Parisi sat down with Monica Long, General Manager of RippleX at Ripple, for a chat about the future of crypto. Two big takeaways from the discussion: regulating crypto cannot “kill the goose that lays the golden egg” but has to balance protection (mitigating the risks and vulnerabilities of crypto) and innovation (implementing policies that unleash the potential of the industry). Parisi and Long agreed that the future of the crypto industry would be a blend of defi (decentralized finance) and cefi (centralized finance).
The Outlook for FinTech Companies
Jill Malandrino, Nasdaq Global Markets Reporter, and Itai Damti, Co-founder of Unit, talked about the future outlook for FinTech companies. Damti believes the most promising crypto companies are those that are providing centralized points of access, versus decentralized companies and those that focus on things like smart contracts. Damti thinks that many tech companies will dabble in financial services over the next decade, but most ultimately will not become FinTechs themselves.
Are we in a FinTech bubble?
Panelists were divided. Patricia Kemp of Oak HC/FT was firmly in the “not a bubble” camp. Kemp believes that the high valuation of FinTechs matches their growth potential. Matt Burton of QED is of the view that “FOMO is driving the deal” as investors, afraid of being left out of the FinTech wave, are eager to invest in early-stage FinTechs shortly after meeting the founders. Kristen Anderson, also on the “FinTech bubble” team, suspected that some of the buy now pay later technologies would encourage imprudent purchase decisions resulting in “buy now, pay never.”
VC Rearview Mirror - What We Had Right and Wrong
This session featured Karen Rios at Lifesaver, Karim Gillani at Luge Capital, Ita Ekpoudom at Gingerbread Capital, and Katie Shea of Divergent Capital, in a conversation focused on social media, valuation and future trends. Gillani said he’s never invested in a company because of a founder’s posts on Twitter or LinkedIn; more likely a founder’s social media postings can do more harm than good sometimes. Shea said great marketing and social media engagement are fine, but cybersecurity and privacy are the backbone. And Ekpoudom added estate planning is one of the most difficult things in life; there’s a lot of opportunity in end-of-life issues, even though it’s not as exciting as focusing on Generation Alpha or Generation Z.
Discussing Challenger Banks
Meigan Fukushima at Mastercard doesn’t think we’re at a saturation point yet with challenger banks. Michael Butler at Grasshopper Bank thinks the saturation is on the consumer side, and the real opportunity is in the commercial side (targeting small business lending) for digital banks.
Tik Tok or Robinhood
Keynote speaker and former FDIC Chair Sheila Bair was asked whether parents should be more worried about their kids being on TikTok or Robinhood. She responded emphatically: Robinhood.
Banking & FinTech Innovation Roundtable
At Thursday’s Banking & FinTech Innovation Roundtable, hosted by Rise New York, participants from across the industry discussed data privacy and innovation, diversity and the regulatory landscape. Shearman partner Mark Chorazak participated in a discussion on the top regulatory and business trends that will affect FinTechs in the near-term.
Top Takeaways from New York FinTech Week 2021
Central bank digital currencies (CBDCs) are getting a lot of attention right now, with some of the world’s largest central banks actively exploring this new class of crypto assets. As China, the US, UK, EU and other countries consider CBDCs, there are big questions about how this could impact banking, lending and a host of other areas. Shearman & Sterling partners Barney Reynolds and Donna Parisi published an article in Reuters last week about the missing legal and regulatory framework for CBDCs. Read "The missing legal framework for central bank digital currencies."
Consolidation, investment and M&A continue to drive valuations higher, with many investors and incumbent players worried about missing out on FinTech opportunities. Consumer trends that emerged during the pandemic have solidified the importance and visibility of FinTech, and public awareness of crypto and digital assets are driving even more activity. For a closer look at trends and issues in FinTech investment, consolidation and M&A, read our recent report produced in collaboration with S&P Global Market Intelligence and Rise, created by Barclays.
In case you missed it, catch Donna Parisi’s live interview during the conference on Nasdaq TV, talking about blockchain, crypto regulation, and diversity and women in FinTech. View the interview.
Thank you again to Empire FinTech team for organizing a great week of events. Visit our website and follow us on Twitter to stay up to date on all of the latest news and insights from our FinTech Foundry. As always, if you have any questions or want to get in touch with us, please contact the Shearman & Sterling FinTech team.
