Couldn’t make it to Amsterdam in person this year? Well, don’t worry; Fintech Istanbul got you covered.

Bringing together financial innovation and FinTech enthusiasts from around the world, Money 20/20 Europe offered an intellectual treat to its participants. Let’s take a look at the highlights of the 3-day event in Amsterdam.

Noteworthy Discussions

Open Banking and APIs

The headline session of Money 20/20, including Daniel Kjellén of Tink & Charlotte Hogg of Visa Europe, was kicked off with a controversial remark: “nobody cares about open banking anymore.” The panelists explained in cohesion that the services and the added value matter more as “real innovation is happening in the value add, which comes from data, an essential part of financial services.”

Charlotte Hogg of Visa Europe continued remarks adding that “the core of anything in payments is the resilience towards cybersecurity and fraud.” When asked whether the war in Ukraine is creating additional cybersecurity threats for payment companies, the panelists answered that “financial players must always be paranoid about cybersecurity as there are no off days.” Accordingly, financial services must be alert regardless of whether it is a typical business day or whether there is an international crisis at stake.”

Another considerable discussion about open banking happened the next day among Karl MacGregor (Vyne), Basak Toprak (J.P. Morgan Payments), Stefano Vaccino (Yapily), and Tom Pope (Tink) about monetization beyond APIs. Stefano Vaccino of Yapily talked about how open banking can be instrumental in improving all sorts of services banks use.

When inquired about which parts of open banking can be improved, Basak Toprak of J.P. Morgan stressed that it is cheaper to retain a customer than to acquire a new one for banks, and open banking can be used as a channel to create new revenue programs. She stated that, especially in the recent economic cycle, there is room for improvement in education and awareness, adding that “access to liquidity is becoming more important and open banking is a great tool for that as a tool for data gathering.” When it was the other panelists’ turn to answer the question, they added quicker payments and better consumer financing to the list.

The key takeaway of the panel was that compared to contactless adoption, open banking is faster and will be used more frequently. Stefano Vaccino of Yapily closed the discussions using BigTech as an example “the fact that Apple is investing more and more into open banking shows that open banking is not tomorrow but today, and if you are not talking about open banking already, you should start now.”

Digital Banking and Profitability

As many questions about the profitability of neobanks remain unanswered, Starling Bank from the UK, with over £9 million in deposits, stands out among its peers with a rare profitability status (18 months exactly). As we have joined the crowd curious to absorb the Starling secret sauce, we have learned that Starling’s no. 1 priority is being sustainable, which comes hand in hand with profitability.

Owning 3% of the retail and 8% of the small business clientele in the UK, Starling does not believe in referral and premium/subscription models as the primary acquisition channel. During her talk, Anne Boden of Starling Bank stated that instead of “buying customers,” which is a long-term drain of resources and is not profitable, Starling focuses on “main bank customers” who use Starling as their house bank. When the conversation evolved into Starling’s valuation being lower than peers (although being more profitable), Boden argued that “valuation is about the customer numbers, but not the value in the pool. We have the highest retention rates in the industry since we focus on stickiness and quality over quantity, but how this method is valued and rated is another thing.”

As the discussion matured, Amy O’Brien of Sifted wanted to learn more about Starling’s SaaS product (“Engine by Starling”). Anne Boden answered O’Brien that although they have built their proof of concept in the UK via a low-cost, resilient business, they will be using this product to sell tech to US banks. She emphasized that they don’t want the local competitors to “access the Starling magic.”

As all tech talks do, the conversation quickly sprinted towards crypto and Starling’s crypto plans. Accordingly, Starling currently has no intention to enter the crypto world due to the high scam rates of crypto wallets (connected to real-time payment schemes). Ann Boden added that her team spends more time protecting people from scammers rather than promoting digital assets as the safety of their payment schemes is in danger due to fraudulent crypto activities.” However, this is not Starling’s final word on digital assets, and the focus might change.

“Starling will be an international global tech company that just happens to be a bank,” said Anne Boden, wrapping up.

According to Boden, Starling will tackle the following headlines in addition to “doing even better lending” in the future:

  • Continuing the justify their customers in the long run
  • Expansion
  • Helping organizations reduce their carbon footprint
  • Embedded finance offering in Europe
  • Improved KYC and AML as Starling’s RegTech infrastructure is “as good as the weakest link.”

Payments 

Stripe’s Co-founder and President John Collison’s talk was the gathering spot for all payment devotees. Stripe is the payments poster child as it reached USD 95B valuation 11 years after the first line of code was written in 2009.

The discussion was kicked-off with a question about whether the recession will slow down the internet economy. Collison answered by unfolding his expectations of offline activity to transform into online since “the broad trend is here to stay, and most consumers are using the internet to optimize costs.” Furthermore, as the real estate crisis of 2008 didn’t stay localized, similar international triggers coming from covid, inflation, supply chain challenges, and energy shocks due to the war in Ukraine could be expected, according to Collison; however, the business will remain the same.

As expected, the drop in startup valuations was a significant question mark during the panel. Collison said that it was hard to sell cost-saving back in the days as the aggressive expansion was the priority, and now there is a different pitch the entrepreneurs must prepare. He emphasized that the founders must consolidate their 2021 pitch decks according to the changing opportunities. He additionally advised the founders to “focus on fundamentals instead of valuations.”

The mention of the new Stripe & Wise partnership (coopetition, if you will) triggered open banking discussions, which could be summarized in one sentence “open banking works in idea, but we need to take it to a stage where execution works.”

Collison also mentioned that FinTechs should provide more choices for consumers, which is why Stripe is cooperating with Apple Pay, Klarna, and Affirm. Nonetheless, he added that “BNPL evolved in the first place since the consumers were not happy with the existing lending solutions,” highlighting the dangers of standing still.

Collison finished his talk by reminding the audience that Stripe is not a bank and has no intention of becoming one. However, the company leans towards being more present in the global economy and becoming the “AWS for e-commerce” by providing more products in the future.

Crypto

Judging from the many announcements and service providers at the event, the new hype in the crypto space seems to be around crypto payments.

Stripe was one of the first movers regarding Bitcoin payments; however, the company turned off this feature in 2013. Many years after the first crypto product attempt, Stripe recently launched crypto payouts (supporting 50 countries) through which businesses can send cryptocurrency payouts to sellers, freelancers, creators, and service providers worldwide. John Collison of Stripe explains strategy with the motive to solve problems and stresses that “Stripe did not enter the crypto space for the sake of entering it.” During his speech, he added that Bitcoin was not working well as a payment method back in the day, but the product experience is much better nowadays. Therefore, the crypto space is more exciting for the company.

Collison adds, “…crypto is a movement as much as a technology. And that bothers crypto skeptics.”

Will crypto and payment providers choose to cooperate or compete in the long run? Judging from John Collison’s speech, better infrastructure and experience will win regardless of the provider.

Digital Euro

Digital Euro has been a hot topic for a while now. Still, with China pressuring Europe, the matter seems more urgent than ever, according to the Digital Euro panel discussions, including Adam Gagen, Inge van Dijk, Marion Laboure, and Olivia Minnock.

“In Europe, we are always lagging behind the UK, US, and Asia,” said Adam Gagen during the discussions, adding, “if we are not moving ahead, we are staying behind.”

“I know (Christine) Lagarde aims 2025, but it will take way longer to do it right,” declares Inge van Dijk. Although there is the will to do it, the greater intention to do it right, particularly involving 27 countries, will take time, according to the panelists.

Metaverse

As one of the first events with such broad crypto and metaverse coverage, Money 20/20 2022 revealed the interest in virtual experiences. Many bank representative attendees we had conversations with indicated that their innovation teams are “looking into the opportunities in the metaverse.” Why, do you ask? The metaverse panel provided an answer for us. The discussion, including Guillaume Vaslin, Steve Suarez, Jelena Zec, and Zoe Wei, explained this phenomenon using several pointers: “FOMO & the motivation to become the pioneer in the industry, branding awareness opportunities for banks, omni-channel customer service and the new payment and trading experience via digital currencies.”

Banking Customer Experience

The question “How does a bank’s technology layer really impact their product design and overall customer experience?” triggered an extensive discussion among Emelie Magnusson, Deniz Guven, Gareth Richardson, and Joy Macknight during the event. According to the panelists, banks are not thinking about the customer all the way, regardless of the extreme amounts spent on tech stack (USD 86B in the US).

“When exploring new tech, it is important to understand the purpose and try early, instead of waiting too long,” said Emelie Magnusson, adding that the providers should always think about what problem the tech is solving.

Deniz Guven supported the comment saying that in the end, the question about how things are configured and used is more important than what is being used. He urged FinServ providers to consider whether “they can defend themselves with their existing operational model and whether this model can be used to attack any existing or new markets.”

During the closing remarks, the panelists agreed that focusing on the “heart share” (experience) is more important than the market share since the latter follows the first.

Tech Driving Change During the War

We kept the best part to last. The panel about whether FinTech can make a difference in conflict and displacement was kicked off by a speech by Mark Barnett, president of Europe at Mastercard. Barnett started his speech by explaining that two weeks after the country’s ambitions to grow the tech share of the GDP by 2025, making Ukraine a tech hub was publicized, the country was pushed towards conflict and uncertainty.

After Barnett’s talk, the audience was given access to the recorded message of Oleksandr Bornyakov, Deputy Minister of Digital Transformation of Ukraine, who seemed to stress the continuous determination of these goals. He announced the Mastercard “Start Path” initiative curated for Ukrainian fintechs and entrepreneurs. Bornyakov concluded his remarks, stating that Ukrainians are efficient, even in a crisis, with a heartwarming call to action “Invest in Ukraine, invest in peace.”

A panel led by Don Ginsel of Holland Fintech followed Oleksandr Bornyakov’s speech, including Ukrainian Fempreneurs Anna Tigipko, Maria Kolganova, Nataliia Slieptsova, and Shevtsova Alyona. The discussions revealed that the financial markets were already quite developed and resilient in Ukraine due to Covid and that the market hasn’t stopped performing even during the war.

The panelists also mentioned that the regulators have interfered after the war, allowing flexibility to financial market players, and the National Bank of Ukraine is doing everything to help. Accordingly, new (virtual) products were launched in the meantime, making onboarding and banking more accessible. Therefore, all this flexibility and cohesion eventually dissolved the long queues in front of the ATMs as people saw that they could still manage and move their money seamlessly.

The panelists seemed to be eager to go back to their homes once the war is over, but their revelations made the attendees realize that technology and female entrepreneurs were at the forefront of the economy and digital services during the war (as men are detained by the armed forces).

We must admit that just like everyone listening to the panel, we were impressed by the solidarity of the tech scene and the true power of digital services (even more critical during a crisis).

Messages From Attendees and Exhibitors

Geographical Expansion

Expansion is a sign of growth and therefore remains a timeless topic for all FinTechs. We have talked to some market experts and government agencies attending Money 20/20 to learn more about the opportunities in their markets. 

  • What to consider when entering the Dutch market?

There are many destinations in the EU, but the first expansion spot is reserved for the Netherlands, our gracious hosts for the Money20/20 event. The country has a vibrant FinTech scene; Amsterdam ranks as the number 3 European Startup City, and FinTechs has an 11% market share in the whole market.

“Amsterdam in Business” and “Holland FinTech” are eager to support the companies entering the market; however, since the market has size limitations, there is a pragmatic approach towards foreign companies entering the scene (which we can only support).

Don Ginsel of Holland FinTech urged the FinTechs that would like to enter the market to check whether it is useful for them to be in the market by answering the following questions “Are my customers, investors, or the talents I need in the market?” He adds that the answer should be “yes” to either of the three; otherwise, there will be no drive to make new entrepreneurs come to the market.

Don concluded our talk by saying that the regulator is very thorough about new businesses and models; therefore, a prior check should be required, adding that “once you have got their approval, it is a stamp of approval for entire Europe.”

Holland Fintech is ready to help newcomers, but do not forget to do your “product-market-fit” homework before packing your bags.

  • Is Australia too far?

Different continents come with challenges, but the Austrade FinTech team is ready to help with the Australian expansion. Karin van Wesep of Austrade impressed us with her welcoming attitude to the market (and the booth – thank you for complimentary beverages) and her knowledge about the stories and business models of the FinTechs in their portfolio. According to Karin, the Australian regulatory environment is very similar to the UK and can be used as a springboard to the APAC region. Apparently, 60% of the population is already using FinTech solutions, and the consumers can be defined as “early adopters that are interested in lifestyle services.”

The Australian Trade and Investment Commission (Austrade)  FinTech team already works with prominent names like Railsr, Afterpay, Airwallex, Revolut, GoCardless, and Wise. The FinTech crew is happy to help with opportunities, challenges, and the competitive environment for FinTechs.

  • What are the particularities of the Polish market?

Poland might not be the first market choice for continental Europe, but it has untapped potential. We learned the fundamentals on the spot from Rafal Tomaszewski of FINTEK.PL. Although starting his talk with the warning that the regulator is still conservative about web3 and crypto products, Rafal mentioned that mobile adoption and digital awareness are high in the market, thanks to the payment silo Blik. He adds that the market is open for foreign FinTechs and that there is a chance to offer “frowned upon” products using foreign licenses as others do.

“Most banks have a good app, but depending on the value proposition, there is a lot of potential in the market,” said Rafal, using Revolut, Twisto, and Klarna as examples of foreign FinTechs accepted in the market.

He will happily answer local market-related questions directly, so don’t be shy!

  • How can we extend our services to Hong Kong?

InvestHK team is as excited to greet FinTechs to the region, helping with the planning, set up, launch, and aftercare/expansion topics. According to Paula Kant and Francis Trollope, setting up a company in Hong Kong is easy and inexpensive and even easier with the help of InvestHK. The talk about the “simple, transparent, and stable” tax regime made even us think for a moment.

InvestHK team additionally stressed that there is an intact opportunity in mainland China and Southeast Asia due to the high underbanked/unbanked numbers, which could be accessed via HK. Paula added that HK had been the world’s number 1 IPO market in seven of the last twelve years. Would you like to learn more? Fire up an e-mail right now.

Embedded Finance

While visiting the exhibitor booths, we snapped an exclusive interview with Iana Dimitrova, the CEO of OpenPayd. Based (and licensed) in the UK, OpenPayd is an infrastructure provider of embedded finance, moving money efficiently cross-border through its rails agnostic platform, empowering the digital economy.

OpenPayd works with enterprise customers mainly, claiming to close the whole onboarding process in 48h, depending on the project. After learning more about their product, we asked Iana for her advice for the new players. She stressed the importance of selecting the right partner, adding that “FinServ providers should study the market and ask questions, especially if they are not providing in their core market niche.”

This interview was especially close to our hearts as it brought together two law-trained business converter fempreneurs.

Funding and Venture Capital

Many institutional and private investors were present at the event, scouting new talent and business ideas. Regardless of the economic downturn and the current state of the venture capital market, the stealth funding news confirmed that hot cash seems to find its way to original ideas and market gap fillers in significant amounts.

FinTech-focused or sector agnostic, many investors, including Coparion, Octopus, Element Ventures, Plug and Play, Finberg, Lakestar, Oak were represented at the event. After meeting Serhat Aydogdu from D4 Ventures, an early-stage tech-driven VC based in London, we have learned that, like many, his fund is “after” crypto solutions that could bring value to the market. He mentioned that he enjoyed the much broader coverage of crypto on this year’s schedule, adding, “if crypto is supposed to become mainstream, it is essential to recognize it as an extension of the transformation of financial services, which has been taking place for the last couple of decades.”

RegTech

As cybersecurity, remote account openings, and AML protection exposure increases due to the pandemic and the Ukrainian war, RegTech remains under the spotlight. In addition to many panelists highlighting the importance of resilient and efficient RegTech solutions during the crisis, different providers worldwide were exhibiting their solutions, including WebID, IDNOW, and Onfido. When interrogated about their USP, Ferhat Alimci and Robin Teufel from WebID mentioned their new product that allows the reuse of the identity with one onboarding. In contrast, Carsten Jahn of IDNOW mentioned the strong compliance aspect of their product.

Announcements

  • Payment giant, Mastercard, announced its latest payments feature, Pay by link, during the event. The new feature is supposed to bridge the opportunity gap between open banking payments and a wide range of businesses.

“We’re in the process of transforming the way people pay bills. With a simple link, we make it easy and secure to pay a bill on the go with a bank account without having to enter or remember payment details. With Pay by link, we give businesses the opportunity to accept and receive payments anywhere and reduce friction in the entire payment flow,” says Rune Mai, Co-Founder, and CEO of Aiia, a Mastercard company.

  • Railsbank, one of the world’s leading platforms for embedded finance experiences, announced a significant rebranding, changing its name to “Railsr.”

“We’ve now changed our name to Railsr, to reflect the seamless financial experiences and positive disruption of traditional finance we deliver. Running on Railsr helps our customers drive relationships, revenue, rewards, and relevance with their customers. We’re here to inspire, enable and support them through every step of their embedded financial experience journey from prototyping through launching and ultimately scaling globally.

Railsr additionally declared the launch of its new Rewards-as-a-Service (RaaS) product “that enables brands to build their own branded rewards programs” during the event.

  • Parallel to Apple’s BNPL announcement, UK Based digital bank Zopa announced its entry into the BNPL vertical. Accordingly, Zopa will focus on merchant financing at the first stage, moving to consumer financing later.
  • During the headline session, Daniel Kjellén of Tink announced two new partnerships with the neobank Revolut and the Dutch payments provider Adyen.
  • Last but not least, Ripple publicized its partnership with Lunu to enable luxury retailers to accept cryptocurrency payments.

Money 20/20 Satellite Events: “Are You a Friend of the Groom or the Bride?”

Event booths are for pitching and merchandise hoarding, however it’s the satellite events where deals get closed. Money 20/20 was no exception in that sense and exceptional events took place, bringing people together.

The first official Money 20/20 after party took place at a forest close to the airport. After a long hike in the woods, the participants found themselves in a festival vibe rather than a (serious) banking conference, which enabled a get together in a cozy evening environment.

On the second day, the after-party took place in the local pub area.

In parallel, many smaller events took place. In the exclusive events, conversation starters were not about open banking, etc. since these events brought different stakeholders (as customary in a wedding), the guests were asking which of the host ventures invited the guests (“are you a friend of the bride or the groom?”)

The German crew came together at the Payment and Banking dinner, which became customary for Money 20/20.

The BeNeLux crew had a fantastic party for locals and partners (and we can already guess how it went, considering the FinTech Paris event).

One of the most successful events was organized by the “embedded finance” crew, including Banxware, Hawk:AI, and Weavr.io at the Soho House. The event brought together many embedded finance players and enthusiasts, revealing the future of FinTech.

Your satellite event wasn’t mentioned here? Invite us next year, and we will be there!

Gazi University Faculty of Law graduate Ş. Elif Kocaoğlu Ulbrich has degrees in Private Law from Galatasaray University and MBA from WHU – Otto Beisheim School of Management, and is also a fellow of Jean Monnet, Joachim Herz Stiftung. After working as a lawyer in various international law firms in Istanbul and Ankara for more than six years, Denizbank A.Ş. He started his banking and finance career in 2013, specializing in business development, project management, FinTech regulation and lobbying activities at FinTech startups (FinLeap, Cringle, Lendico) in Hamburg and later in Berlin. Co-author of The PAYTECH Book, The AI ​​Book and The LegalTech Book, which are planned to be published in 2020 in cooperation with FINTECH Circle and Wiley, Kocaoğlu Ulbrich has been providing consultancy, training and publishing services since 2019 through Berlin-based Contextual Solutions, which she is the founder of.