Category Archives: Finance

Things We Learned at CommonBond’s 2018 Fintech Trends Breakfast

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In 2018, Look Out For Bank-Fintech Partnerships and Big Tech

If 2017 was the year in which fintech grew up, 2018 will now require big banks to catch up — or miss out. Klein explained it like this:

“You have two things happening simultaneously: you have fintechs that are becoming ‘real companies,’ that are sustaining, that have garnered the respect and credibility of the market, inclusive of incumbents. At the same time, you have incumbents who have been sitting on legacy technology, who, if they do not get in the space in 2018 in some regard, or look and feel ‘fintech-y’ in some regard in 2018, they’ve missed the boat. 2015 and 2016 was about sniffing around the edges, 2017 was about digging deep, and 2018 — for the big companies — will be about entering in some capacity.”

The likeliest path for big institutions to join the fintech game? Partnerships. Consumer-facing bank-fintech partnerships may well be the name of the game this year, beyond the capital-facing bank-fintech partnerships already taking place.

In addition to big banks, keep an eye out for big tech to make major moves in the world of finance in 2018. “If you’re reading a lot in the space, you already feel it,” Klein declared. “You can already see the connective tissue happening if you’re really plugged in. And I think that’s going to hit kind of a mainstream consciousness in 2018.”

Don’t Expect to See Many (If Any) Fintech IPOs

All three panelists agreed: in trying to predict who might IPO next, you have to figure out which companies might be ready, and it takes a lot for a company to be ready to IPO. Hans Morris set forth four conditions needed for a company to go public: absolute size, valuation, governance change, and a broad investment thesis.

With all this in mind, which fintech companies are truly poised to IPO in 2018? According to Snitkof, there aren’t many that fit the bill. “One thing I would look for if you’re thinking about what companies are going to go public is: Who already treats their company as if it is public? Who has that framework in place, is already reporting like a pseudo-public company, who treats it like that? It takes a lot, there’s a big cost to that, but it’s part of a long-term plan if that’s your aspiration. I don’t see too many people doing that today.”

International Fintech Markets Are Booming

The U.S. might be fertile ground for fintech, but there are plenty of intriguing happenings in the international financial community, too. Snitkof identified three major points of interest for fintech around the globe:

The UK — “They’re a very mature economy, there’s really strong regulation but it’s also really clear and supportive regulation, so if you’re starting an alternative lender there, or a payments company, or a challenger bank — of which there are quite a few and some have done quite well — you know what regulators to talk to, you know what regulator to apply to, there’s a clear framework. They really want to help you.”

China — “You see massive, massive rates of growth in the tech companies there and every company you talk to, it’s kind of astounding because they are 10 times larger than their U.S. equivalent counterpart.”

Estonia — “Estonia is on the bleeding edge. … They’ve created this concept of ‘e-residency’ where you can become a citizen of Estonia digitally, an ‘e-resident,’ so you can open up a bank account there, you can incorporate a business there, without being Estonian. They’ve used their small size and nimbleness to create what they hope is going to be really fertile ground for innovation and that’s very interesting.”

Here’s What Won’t Change This Year: The Need for Humanity in Banking

Big banks, big tech, big finance… what about the consumers, the human beings on the other end of the smartphones and laptops? After all, fintech has its roots in creating more consumer-friendly experiences for consumers, and consumers continue to crave a sense of humanity in their financial services. Regardless of what year it is or what great technical innovation has taken the world by storm, people still want to be treated like people — and they really want to trust their financial institutions.

This year, keeping the consumer’s humanity in mind will be crucial for fintech companies. “Any successful, profitable fintech model over the past five years, banks are going to copy it,” said Snitkof. “Some will do a really good job of copying it, some will do a terrible job of copying it and it’ll be up to consumers to decide who they’re actually going to get served by, but it’s also going to push any fintech innovator to really innovate and think about what’s next to differentiate themselves from a brand that already has some pretty implicit trust and stability in customers’ minds.”

Which Customer Groups Are Next to Get Some Love From Fintech?

Finally, the conversation turned to identifying the most underserved communities when it comes to fintech. Who did our panel agree were fintech’s biggest untapped markets?

Baby boomers. Morris sees a tremendous potential in the generation of workers who are retiring now — but who don’t identify with the typical image of a retiree. “I went to all these 60th birthday parties and none of these people think they’re ready for walk-in bathtubs or whatever; they are kite-surfing and doing all these other things… The other thing that’s different about baby boomers is there’s lots of them and they have money to spend, and so the wallet is really significant versus many of the products we see. You’re focusing on, for example, asset management for millennials, well, they’re investing $100 and it’s a long time before that builds up to a profitable level… So, focus on older people. They’re just as digital.”

International students. With an eye toward the CommonBond realm of education finance, Klein identified an underserved market in international students attending U.S. schools. “I’ve been really wanting, hoping, searching for ways to serve that population ever since we were founded, in large part because we get a lot of feedback from the international community when we go to campuses and they say, ‘Hey, can you do anything for us?’ And we haven’t been able to really quite crack that nut just yet. But I wouldn’t be surprised if we did at some point. I don’t know if it’s 2018 or beyond, but I wouldn’t be surprised if we’re able to do that.”

Fintech Trends That Will Shape 2018

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Open Banking

Soon, the UE’s Payment Services Directive 2 (PSD2) will come into force. Banks will be required to share their API, that is, their programming interfaces to third parties. That will allow other companies to create tools and apps to manage financial operations of big and small clients. Those can be, for example, e-commerce or product comparison platforms.

In collaboration with the administration, banks are also working on Polish API, an integrated interface providing third-party companies with an access to the user’s account. The implementation process will be even faster, if Polish API includes creating a sandbox for the banks to test their solutions on fictitious data,

Blurred Lines

Micropayments are becoming a vital part of our lives. It is especially apparent in social media, such as Facebook, which have become mainly advertising or commercial services. “A trend I’ve been observing for the last 18 months is that consumers’ lives: the social, commercial and financial aspects of them, are all bound. They are provided by consumer-centric platforms that ‘blend’ into everyday experiences,” said Pat Patel, CEO Money 20/20, during Impact fintech’17. The next stage is marketplaces, where data, services and products can be purchased through new payment systems. In the following years, they will become commonplace.


Things don’t have to be that complicated. Machine learning, neural networks or autonomous machines are still taking baby steps, so they aren’t going to be immediately accessible. It’s the time to focus on big data analysis and text mining.

To help with that Robotic Process Automation (RPA) will be progressively introduced into processes that, up to this point, required a toiling and repetitive job. It is especially useful in the sectors of AML, risk management, sales, and marketing, as new regulations protecting consumers ( such as RODO) have been introduced.

Conversational banking

Technology becomes increasingly complicated. A regular Joe won’t easily find their way in the maze of new solutions for banking. That’s why chatbots will make all the difference, and their integration has already started. From now on they will provide us with all the necessary info and solve most of our problems, without a need for a human consultant. For now they will not be AI-based, but will be given scripts to follow, but it’s still a big step.


The insurtech sector has fallen behind, innovation-wise. Now, that the technology provides more advanced and reliable solutions, it’s trying to catch up. Data analysis and flexible pricing strategies have become a vital part of the insurance companies’ work. Next on the list are finding uses for distributed ledger and creating new products for shared economy.

Funding innovation

Startups don’t need to fret about money. New funding sources are appearing, both in the public and private sector. As much as 4M PLN will be distributed to innovative enterprises through various funds set up by PFR Ventures. Check out where you can apply here. For instance, Starter is for pre-seed-stage startups; PFR Open Innovation Fund is dedicated to SME companies which implement technological projects under the open innovation formula; and Koffi – for SME companies at the stage of growth, development/expansion.

“Watch China”

“Watch China,” were the words of David Rowan, editor at WIRED; and he’s right. Chinese technological leaders have created extremely successful e-commerce platforms, such as Alibaba or Tencet, based on dynamic data analysis and friendly interfaces. In terms of fintech, they are a huge competition for the rest of the world, and now they aim to expand. That should spur other countries to up their game and go big, or even bigger.


Everyone wants to use the blockchain technology, but somehow, no one really does. Big financial institutions are not too keen on the idea of decentralisation. This, combined with a lack of traditional benefits from scaling, successfully discourages further development of that technology.

ICO (Initial Coin Offering) is a small flicker of hope for blockchain. Perhaps it will result in more concrete projects, which will encourage people to use this technology.

Big players

Fintech is not only startups and dated financial institutions trying to upgrade. Technological giants, such as Amazon, Microsoft, or IBM, are also interested in entering that market. They design software or even whole operating systems for banks. There are also many incubators, accelerators, and CVCs, aimed particularly at large corporations, that help them branch out.


New verification systems are rapidly developing, and they are increasingly more complex. They don’t only base on audio or video (like iPhoneX’s facial recognition), but also on kinaesthetics (such as the pacing of your handwriting or even your thermal trace). Building those new solutions requires even more interdisciplinarity and coworking.

Regulations for innovation

Polish Financial Supervision Authority (KNF) has launched the Innovation Hub programme this January. It helps fintechs with all things legal: laws and regulations, business models, product/service creation and management. What’s more, there are big chances of building a regulatory sandbox this year! Also, KFN and Prime Minister Morawiecki are working to transform the regulator into a dedicated department. Poland is the first to implement such a solution.

As you can see, 2018 will bring us a lot of changes! Poland’s fintech is developing at a really fast pace, and we will certainly implement a lot of revolutionary solutions in the years to come. So, stay tuned and let’s meet at Impact fintech’18!


Blockchain in Financial Services

The technology that underlies Bitcoin will take center stage in the development of financial services in 2018. If 2017 was mostly about looking into the benefits of blockchain and testing it, 2018 will see the first major blockchains in financial sector. For example, Ernst & Young and Maersk will roll out a blockchain-based marine insurance platform.

blockchain solutions

In 2018, the finance sector will leverage everything the blockchain technology has to offer, across most financial services. Blockchain-based securities trading will reduce costs, minimize complexity, and increase the speed of trading and settlement processes. Blockchain-based P2P and SME lending platforms will help financial institutions scale easier and more efficiently. Cross-border payments and mobile payments will become cheaper and easier, as blockchain significantly reduces the number of participants and payment delay. Additionally, smart contracts will gradually bring automation to the majority of financial services — from trading securities to lending and insurance services. Initial coin offerings (ICOs), custom smart tokens, and identity solutions will also remain in high demand.

Most importantly, blockchain brings the highest level of security to finance industry across the board. As a result, financial services providers and their clients will always be confident the funds are secure.

Mobile Payments and Transfers

Partly owing to the adoption of blockchain, the usage of mobile payments and transfers will continue to grow. More and more millennials use financial services, and they prefer a digital approach that includes mobile. They also expect a better and much faster service, with as fewer steps as possible (older age groups follow suit quickly). Additionally, the globalised business environment increasingly relies on instant international money transfers. The ability to send and receive funds across countries in a matter of seconds becomes a must in today’s competitive business world.

To succeed, financial institutions and companies will follow the steps of J. P. Morgan and create their blockchain-based mobile payment systems. In 2018, the world will also see more blockchain wallet apps that instantly allow to transfer and exchange cryptocurrencies while staying incognito. The number of blockchain-based online exchanges like KlickEx will also rise, as solutions like this allow to process cross-border payments in a matter of seconds.

Finally, the demands of millennial clients will give a push to more digital-only banks and instantaneous smartphone payments at checkout (with Apple Pay, Android Pay, or other).

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Artificial Intelligence in Financial Services

As the developments in the field of artificial intelligence continue to advance, and as more and more industries adopt it, the finance sector will follow suit.

The promise of AI is as big to finance as it is to any other industry. In 2018, financial companies will employ machine learning algorithms to detect fraudulent activities and potential hacker attack spots in FinTech software; use these algorithms to automate financial reporting, reducing processing time and human error; implement deep learning algorithms to quickly derive unexpected insights from Big Data and gain a competitive edge.

Finally, as the world continues to go mobile and stay busy, the need for more advanced financial consulting is growing rapidly. The solution comes in robo-advisors, which will be available mostly in FinTech apps. They will provide automated financial planning services driven by AI algorithms — for more solid, spot-on, and quick financial advices. Moreover, FinTech robo-advisors will allow younger and less financially savvy people to start investing.