Toward the end of each year, thousands of technology and finance folks converge on Las Vegas for Money20/20 USA. This year’s event was mid-October.
I have no idea whether Money20/20 is the biggest financial technology conference, but it certainly eclipses any of the other shows I regularly attend. It of course doesn’t compare with Comdex of the late 90s in terms of size, but it does have the same feel as Comdex. This is a show where small exhibitors go big and big exhibitors go bigger.
I talked to a lot of different people about a lot of interesting topics, but a few themes seemed to bubble to the top of every conversation I had. If these topics are top-of-mind for a wide range of industry experts, I’m going to go out on a limb and say they should be top of mind for you and me, too.
1. There’s cloud, then there are all the ways computing used to get done
I’ve beat the cloud drum a number of times in this space. I’ve talked about the need for credit unions to get out of the hardware business so they can focus on not getting their asses kicked by everyone from the bank down the street to Google and Amazon. I’ve talked about all the money you save not having to spend it on hardware upkeep. And I’ve talked about the scalability of the cloud, providing just as much computing power as you need, when you need it. The one area I haven’t really dived into is the value of the cloud as a software delivery channel.
When a vendor develops its software in and for the cloud, that software is inherently scalable. As I noted earlier, the cloud is all about scalability. And when software is very scalable, it can be sized up and down to meet the needs of a wider range of credit unions. Plus, keep in mind that the software developer isn’t paying for hardware either. All that in turn means the software can be priced more flexibly, making it more accessible.
Consider, for example, artificial intelligence. Not so long ago, only the biggest of the big financial institutions were investing in AI. That’s because they were the only ones that could afford AI. Today, AI technology delivered via the cloud is within reach of even small credit unions.
As Sean Breen, Senior Director of Banking and Payments Consulting at NTT Data Services, commented to me, “Why has the cloud picked up steam lately? One reason is that it makes very expensive solutions available to a wider range of institutions. The cloud gives credit unions access to these tools and lets them level the playing field.” He added that because of their willingness to work together, credit unions have a natural edge.
2. Your data really is gold. Maybe even platinum.
Breen went on to say that while credit unions do a great job of managing member relationships, they need to start leveraging technologies like artificial intelligence to make better use of the data they have at their disposal.
Mickey Goldwasser, VP of Marketing for PayRailz, echoed this thought. He pointed out that machine learning and AI can leverage data to, for example, become more predictive when it comes to bill payments. Why is that important?
“It means becoming more assistive to the member,” Goldwasser told me. “The credit union knows what bills I usually pay, so it can remind me as they become due, pay the bills as needed, or even move money from account to account to cover a bill payment.”
3. A better user experience (UX) wins every time
“What we’re trying to do at Payrailz is create a payments experience for the consumer,” added Goldwasser. “We can even look at your bills and say, for example, your mobile bill looks high. Do you want us to renegotiate it?” He said that as credit unions look to improve the member experience, they need to carefully consider every touchpoint.
One of the hottest buzzwords in UX circles is frictionless. However, not every interaction can be frictionless, nor would you want it to be. Instead, every interaction needs the appropriate level of friction.
“Say for example you transfer $50 to your son for pizza money every now and then,” Will LaSala, Director of Security Solutions for OneSpan, told me. “That becomes a known transaction that requires very little friction. But if you’re transferring $50,000 to a person the credit union doesn’t recognize, you as the consumer should want and expect some friction.” He said that technologies like machine learning and AI can leverage data to determine the appropriate level of friction in any transaction, thereby creating the optimum member experience.
4. Cards will live to see another day.
I was surprised to see how many vendors there were pitching various forms of plastic. If you spend much time reading tech news, it’s easy to believe that every transaction from buying plastic cups for beer pong to buying a home to play beer pong in will soon be done exclusively from your smartphone.
“We recently completed a global study that showed cards aren’t going away any time soon,” said Alyssa Arredondo, Director of Financial Vertical Marketing at Entrust Data Card. “What’s changing is how cards fit into the digital ecosystem.” She pointed out that virtually all digital banks issue debit cards, and even companies like Venmo have started issuing plastic. What is becoming more essential in keeping pace with today’s consumer, she added, is instant issuance. Nobody wants to wait for a card.
With 2019 staring us in the face, I suggest we all keep these topics top of mind in the coming months.