Money 2020: The Last Word

It’s pretty much the last word for Money 2020 as next year is 2020 and it is with this in mind that I am thinking about the conference and the industry, where we have journeyed from and opportunities still left to uncover.

First, my main takeways from the conference:

1. There was little in the way of breakthrough innovation. Regardless of booth size, most of the players on the exhibit floor (not the ones on the outskirts) were all bonafide companies with customers and deployed products and solutions. This is a not a bad thing; it is sign of industry maturation, that the vision set forth about 10 years ago has been realized. All involved should feel a sense of accomplishment and pride. The use of mobile payment has increased to 60% in 2019, whether it is mobile wallets or retailer apps, according to a new study by the Mercator Advisory Group. This jives with another report released this week, showing that consumers have used their smartphones for nearly 61% of online transactions so far this year, an all-time high. Most importantly is that this adoption was not limited to millennials, 64% of baby boomers also engaged in mobile payment. The challenge for the industry, however, continues to be how to enable these transactions in the most secure and convenient way. Fraudsters and scammers are not going away.
2. There was also little in the way of standalone technology, or more specifically from my vantage point, standalone biometrics. Identity is now part and parcel of the payments and “future of money” world; it is not a separate notion that has to be fitted into a workflow, it is an integral part of enabling security and convenience in our financial lives. This holds true for identity verification systems utilizing document validation and facial recognition technologies; behavioral biometrics for enhancing onboarding flows and preventing account takeovers; form-capture applications and more.  Offering identity technologies without policy managers, case managers, step-up authentication options is simply not enough to satisfy the complex demands of financial enterprises that already contend with an unruly tech stack.
3. Concerns over privacy were rather muted, or should I say solutions that address the concerns were not talked about much. I found this so interesting; there is a war raging in policy circles on how to deal with the collection, processing and storage of personal data. Lawsuits under the Illinois biometric law (BIPA) abound; California’s data protection law is coming into effect in January. There are exemptions in these laws for banks operating under Graham Leach Bliley, which will allows regulated entities to continue their fraud prevention efforts, but fintechs and retailers that are involved in collecting or enabling payments for all various purposes are operating under different rules. What does this mean for them and the consumers that hold them responsible at some level for assuring they are not enabling fraudulent transactions, when it is clear that biometrics are at the core of doing so? 

So where does this leave us in terms of the future of money now that 2020 is here?  

• Solving for the convenience factor. Most of the solutions and the discussion were about security and fraud detection. But the consumer is screaming for convenience and has already indicated that they will abandon merchants and banks that don’t give them full access to features and functionalities they desire. Convenience is also about customizing the experience and giving consumers access to specific products and offers that match their individual preferences and profiles. It is no secret how effective this is in the retail world; tackling this should be the next frontier in the fintech world but there are questions on how this would be done in a non-discriminatory way.  
• Coming up with new fraud detection models. It is time for new frameworks that don’t require a bank or a merchant to incorporate 57 solutions into their tech stack; by definition this requires a reworking of the definition of identity so we are not dancing around the issue by verifying devices, locations, past activity, and all other static data that can be obtained on the dark web. One common thread at the conference related to consortiums and data sharing, which seems the obvious way to go, but without resolving the privacy issues, it is hard to envision precisely how these models play out beyond the banks or anti-money laundering world. 
• Making real-time payments a reality. For five years, the Federal Reserve has been working on this, while in many other parts of the world, 24/7/365 settlements have long been a reality. The latest target date for implementation in the US is now 2023 or 2024. It’s time to get real. It is true that the market here is big, it is complex, it has tremendous legacies and disparate infrastructures need to come together. But it is also true that the fintechs and the financial institutions that adapt the fastest will stand to win the most. This means tackling all the issues described above – streamlining fraud prevention and identity management and technology architectures, addressing privacy and data protection, and developing meaningful use cases that are about customer convenience.