As new innovations are introduced in fintech, the segment will continue to fragment and grow says Simon Fairbairn, Director of Solution Development for Western Europe at Ingenico Group in this GlobalFinTechSeries interview.
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Can you tell us a little about yourself Simon, what’s a typical day at work like for you?
I’ve been in and around tech for most of my career but jumping in and out of different industries whilst I gathered experience and skills. After 20 or so years, I’ve settled into the Payments Industry with Ingenico Group and I’m really enjoying my role leading the development teams in Western Europe and professional services in EMEA.
Like most of us, I don’t think there is such a thing as a typical day anymore. For me, any given day presents a new set of challenges to overcome or opportunities to capitalize on. Whether that’s about figuring out how to solve and deliver a specific piece of development for a customer, or overcoming a particularly gnarly technical challenge.
Given your time and expertise in the technology segment, how have you seen fintech evolve over the last few years?
My role in fintech is relatively recent having come back into the payments industry after a 17-year gap. I’ve been in technology roles for some time but with a different focus (TV & Media, Construction, TelCo). The differences I see coming back into the industry are massive with huge changes over the past few years. Significant growth has come in user experience, mobility, the sheer scope of services offered, the level and make-up of security infrastructure and process, and of course, the rise of new players.
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How have you observed new innovations within the global payments and fintech industry redefine the global banking system?
The increasing digitization of services and focus on customer experience, and the use of data and AI to support the delivery of services, have all had a part to play in the fairly rapid transformation of the financial sector. We now have new tools coupled with new thinking which help to solve what are often old problems.
For example, the increased use of AI to facilitate learning systems, to credit score and enable access to finance. Also, encryption services in payments that provide greater confidence to customers and merchants in the battle against fraud, and the rise of services delivered at the point of sale using its unique position as a point of trust.
When it comes to some of the most in-demand features for new fintech products, what according to you are some of the biggest gaps between what B2B users want more of and what innovations are being offered today?
Where I see a gap in service provision is not so much in a shortfall of new discrete services, but rather the limitations borne out of not being able to join services end-to-end in a manner that makes sense to the customer. This is an issue that arises from the complexity of collaborating in a competing market, the complication of joining varying standards and, in part, the compliance restrictions resulting from legislation such as GDPR and its impact on data sharing.
From the perspective of an end customer or business; if I can join my payment systems to my back office systems, support taking payments on multiple platforms, gather, share, analyse and drive date led decisions and lest we forget, combat fraud in a joined up way.
What are your predictions for this segment, what do you think the B2B Fintech market/landscape would look like in the coming years?
My take is that is that the segment will grow and continue to fragment as new innovations surface and new players rise to the fore. This will most likely be closely followed by a process of consolidation as the big players move to secure or suppress much of these innovations and players.
What is clear is that the scope of services offered, the richness of what they offer, the technology and skills required to support them and the end customer experience, will only get better. Utility and value are key qualities and those players in the market who can strike the right balance will continue to have a role to play.
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Specifically, I think we will see three areas of growth:
Services – the services available to merchants and customers will continue to proliferate with new ways of doing old things (payments options offered in more flavours via different routes) and new services never offered before, let alone imagined.
Connectivity – more devices and services will connect, allowing them to be offered across multiple channels, the sharing and flow of data to help understand and optimise insight on what is happening, and how it could be improved in areas such as loyalty, security, experience, marketing, etc.
Security – to inhibit the growth of increasingly complex fraud, security systems will have to grow and evolve in order to find new and more secure ways to protect customer and merchant data, whilst trying to remain unobtrusive in its application.
What are some of the biggest challenges/impediments to global innovations in fintech according to you?
I can see four key dimensions constraining innovation in the Fintech space:
Talent – to unlock innovation, you need access to talent and for it to operate in environments conducive to exploring and taking risk. Right now, the growth of people coming into the industry is too low.
Collaboration – many points of innovation are beyond the means of any single organisation. To deal with the complexity, cost and risk involved with bringing new solutions and services to market will require more organisations to come together. This does happen, but only to a degree and it’s clear that there are still many barriers to genuine effective collaboration
Compliance – whilst the compliance legislation is there to protect us all, it can be quite bureaucratic and from an innovation perspective it can serve a significant brake.
Fraud – as fast as the market can innovate, there is an equivalent and almost equal force investing in how to illegally capitalise through Fraud. Sometimes innovation can play to this opportunity providing better ways of prevention, but for other elements, it can limit the number and nature of innovations that breakthrough.
Could you talk about some of the most innovative fintech apps and platforms in the banking industry that you’ve come across that according to you are set to be new game-changers for this niche?
There are too many exciting developments to mention them all. Two areas that have caught my attention are the B2B lending services, such as Funding Circle and Iwoca, and of course the rapid growth in online banks such as Monzo and Starling. Beyond the fact that each of the players has brought fresh digital thinking to their offering, it has been their challenger status to the incumbent players, such as the Banks and the Acquirers, that has been the most interesting to watch. Not just their own market penetration and growth, but the response effect they have elicited as the incumbents evolve to compete or acquire.
There is definitely more to come in this space as the market is finite and the pace of change is sure to only drive more benefits for the customers and business who use these services.
How would you hope/wish/aim for the fintech segment to alleviate the top pain points B2B users face?
Invest more in collaboration and finding ways to help bright, motivated people work together to join up the services and solutions already on offer. Work from the perspective and need of the end user and design back to how things would work if the customer was the designer.
Tag (mention/write about) the one person in the fintech industry whose answers to these questions you would love to read!
Nick Hungerford, Nutmeg
Your favorite fintech quote.
Technological innovations will be the heart and blood of the banking industry for many years to come and if big banks do not make the most of it, the new players from fintech and large technology companies surely will.” David M Brear
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Ingenico is a global leader in the fintech market, with more than three decades of experience. Its footprint gives scale to projects and talents. Innovation is part of their DNA and their diverse community of experts keep anticipating the evolution of commerce worldwide.