For two days in early October, Europe’s financial services sector movers and shakers met in London to discuss what the future of the industry will look like. Lendit Europe is the premier event for innovation in financial services. During this year’s event, three key themes emerged from the different panels and addresses:
- The importance of banking customers
- Questions about peer-to-peer lending in the next downturn
- Is traditional banking dead?
The Importance of the Banking Customer
The head of the UK’s open bank initiative, Imran Gulamhuseinwala, gave an optimistic and enthusiastic presentation about why now is the time for open banking. Gulamhuseinwala also spoke at length about how the consumer is the center of open banking and how open banking could bring more customers in the banking ecosystem if fintech firms embrace it.
The idea that the customer must be at the center of all banking initiatives and products was reiterated by many speakers including Zopa CEO Jaidev Janardana and StarlingBank CEO Anne Boden. Boden even suggested that making customers a part of the development of new banking products was the key to future digital banking success.
What Happens to Peer-to-Peer Lending During the Next Economic Downturn
There was a lot of discussion at Lendit Europe 2017 about peer-to-peer lending. This segment of the financial services industry has taken off around the world faster than anyone could have anticipated.
However, the rampant growth of this sector is beginning to worry some academics and policymakers. Many wonder what will happen to these peer-to-peer networks during the next economic downturn. Are they robust enough to survive? Are they so big that they may damage the wider economy if there are widespread defaults?
While many remain divided about how peer-to-peer lending will handle an economic downturn, most experts did not see any reason to believe these platforms would fare any worse than any other lenders and that they posed little systemic risk.
Is Traditional Banking Dead?
Panel and after panel talked about the future of traditional banking. While many media pundits love to speculate about the demise of traditional banking, traditional banks themselves appear eager to adapt to the new environment. While traditional banks are far from dead, the idea of doing business as usual is dead.
Representatives of traditional banking powerhouse like Lloyds and RBS at the conference made a strong case for banks to coexist with non-bank financial entities.
One of the concepts that was repeated in panel after panel was talked about in detail by Upgrade CEO Renaud Laplanche. Laplanche spoke about why the re-bundling of financial services would be a major driver of growth and new products in the industry in 2018.
Lend Academy publisher Peter Renton noted in his detailed Lendit recap that re-bundling has already been going on in the UK for the past several years and the trend seemed to be accelerating.
Revolut CEO Nikolay Storonsky gave proof to the idea that financial service re-bundling is hugely profitable when he spoke about how is company was able to grow so fast. Revolut recently completed a £50 million round of financing and its business model is centered on re-bundling.
Lendit Europe 2017, as usual, was a great event that showed a spotlight on the promising future of technology and financial services.