FinovateSpring 2024: Mobile payments and understanding Gen Z dominate day two
As FinovateSpring 2024 entered its second day at the Marriott Marquis in San Francisco, the conference sustained its momentum with a line-up of innovative tech demos, debates, keynote addresses, and the announcement of the Demo Best of Show award.
Cascading AI receiving a Demo Best of Show award at FinovateSpring 2024
The day kicked off with the highly anticipated ‘Analyst All Stars’ keynote addresses, which tackled several pressing topics, most notably the role of banks in mobile payments.
The future relationship between banks and mobile payments
“Mobile payments isn’t just a story about growth, it’s a story about disruption.”
Tiffani Montez, principal analyst at market research firm Emarketer, opened proceedings with a talk on the future relationship between mobile payments and financial institutions.
“The lines between mobile wallets, P2P, tap-to-pay, and commerce are blurring. It’s going to unleash new forces in the market that will drive new entrants, intense competition, and bold strategic moves in a wave of innovation that will transform mobile payments from payment transactions to commerce enablers,” she says.
Montez references the likes of Paze, Early Warning’s digital wallet offering, as a new entrant set to compete with Apple, PayPal, and Venmo.
When discussing Apple and its dominance in the space, Montez says its “walled garden may soon start crumbling down” because US regulators expect to follow in the “Europeans’ footsteps” and force Apple to open up its NFC technology.
Montez also predicts that the future of wallets may see them providing subscription capabilities, targeted retailer ads, and generative AI shopping assistants.
However, for banks, Montez claims they have the “strength to punch back” and regain some of the market share from the leading paytech players.
This is due to traditional financial institutions “already having consumer trust – they have the data, and they now have the infrastructure meeting pay and sell”.
Montez concludes by suggesting that banks must “jump into the wallet scale” and look to embed financial products into P2P experiences.
Tech demos take centre stage
Similar to the first day of the conference, day two featured a series of innovative tech demos. This included open banking and payments vendor BaasFlow, whose co-founder and CEO, James Dailey, took to the stage to showcase their API-driven app, which he described as a “kind of instant buy now, pay later concept”.
Moreover, New York-headquartered Bloom Credit showcased its B2B credit data infrastructure platform, Bloom+, set to launch next month. Japanese business intelligence solution Dynatrek demonstrated how it integrates legacy systems with digital banking in real-time, while Texas-based Trice presented its instant payments service.
In addition, day two of the conference concluded with the presentation of the Demo Best of Show awards. Six winners were presented with trophies: Cascading AI, an AI-driven loan originator; QuickFi, a self-service business equipment financing platform; Remynt, a digital-first credit card issuer and debt buyer; Savvi AI, which enables enterprises to build and deploy AI applications; Kobalt Labs, an “AI co-pilot” designed to automate risk and privacy; and the aforementioned Bloom Credit.
Understanding Gen Z
One of the most highly anticipated addresses of the day was Gary Rudman’s talk on what banks and fintechs need to know about the Gen Z worldview.
Rudman, the founder and president of California-based GTR Consulting, which researches the relationships between young consumers and technology, labels Gen Z as a “challenging generation” that differs significantly from their predecessors.
This is partly because Gen Z, those aged between 11-26, are digitally native and have lived through various crises such as the pandemic, recessions, and multiple conflicts, argues Rudman.
Moreover, they are a demographic that financial institutions, especially traditional incumbents, have not yet properly connected with.
“88% of bank managers believe they understand the needs of Gen Z account holders, but only 34% of Gen Z agree,” Rudman says.
He lists several reasons for the disconnect between the traditional finance industry and this demographic.
Firstly, they feel that older generations are not acting in their best interests. Additionally, they place a high value on work-life balance and are constantly seeking change. According to Rudman, a typical member of Gen Z stays in a job for an average of 2.3 years.
Furthermore, Rudman describes them as the “arbiters of political correctness,” ready to stand up for their opinions, values, and beliefs.
As the address came to an end, Rudman provided a roadmap for fintechs and banks on how to connect with this generation.
For one, financial institutions must be adaptable and communicate with Gen Z in an “authentic way,” ensuring a commitment to inclusivity and social justice in both their discourse and actions. Importantly, fintechs must remain culturally sensitive, respecting pronouns, gender orientation, and mental health concerns.
Moreover, Rudman highlights the importance for businesses to “take away the awkwardness” due to Gen Z’s FOMA – fear of mild awkwardness.
He references a recent study conducted by his consultancy firm, which found that teenagers and young adults favour companies like the US neobanking service provider Chime. They appreciate these companies because they allow them to sign up for products with “no judgment” and without “going into banks to sign forms”. Any service that makes tasks “really easy for them” is well on its way to winning over members of Gen Z.
Check-in tomorrow for a roundup of the final day of FinovateSpring 2024, which promises to continue enlightening and informing attendees.
