In the list of potentially disruptive players for the banking sector, FinTechs tend to become complementary players with business models very different from traditional models. Finexkap “challenges the banking system, and more specifically the factoring sector, by democratizing access to finance for businesses through technology.” Arthur De Catheu and Cedric Teissier, Co-CEOs of Finexkap, informed us about their vision for FinTech.
Beyond factoring and as a co-founder of France FinTech, in what areas of the financial sector do you think FinTechs have a role to play?
FinTech has started to invest heavily in all sectors. Thus, the finance for the means of payment part is essentially a transactional channel and the added value of the FinTech is to facilitate the use, the commercial transactions. In our opinion, FinTech will have a very visible impact on these dimensions. This is a fundamental trend of which we still only see the beginning of innovation, but what interesting is the theory of “invisible finance”: FinTech will only make sense and become a system or business sector once all the underlying financial transactions are so invisible that friction will become minimal from the user’s point of view. In other words, the FinTech will really be imposed when you will not even be aware of using it.
Faced with the threat of disruption of FinTech, some banks reacted very quickly. This is the case of Goldman Sachs, very opportunistic, who is one of the biggest investors, buyers and fintech influencers. But there are strong cultural differences in terms of vision and maturity for European banks. Nevertheless, we think that today banks are very concerned about the FinTech ecosystem. They understand that part of the innovation and future of financial services is there, so it’s time to work together. In our opinion, 2018 is the year of strategic and capitalization.
All banks are ready to jump on all subjects. There is also an awareness that the real danger is not to prepare for the future; these banks are about managing a problem with new generations. There is a real disavowal of the bank to solve with the generation of millenials who will want to manage their bank accounts or their access to financial services alone. Banks need to take this issue through technology and user experience, they have no choice. In our opinion, they have accepted today the fact that they will have to address it in part by collaborating with FinTech.
Finally, FinTech is said to be the “outsourced bank laboratory”: we can allow banks to innovate through us, being much less constrained to very strong internal brakes (regulatory, budgetary, IT debt burden). , etc.).
In our opinion, Artificial Intelligence and Blockchain are the two sectors that have the least demonstrated their potential because they touch on profound subjects of technology. The other FinTech innovations are mostly revolutions of use, where AI and Blockchain are purely technological revolutions. At Finexkap, we work internally on AI through credit analysis algorithms or appetite for a financing product. We have also started R & D projects on the use of the Blockchain.
Software publishers also have an extremely important role to play in the evolution of the Finance of tomorrow: Criteo can arrive at a retargeting more and more thin thanks to the AI, chatbots can allow a further customization of customer service … for example, we work in partnership with some accounting publishers to improve financing and billing systems.
Let’s not forget that Artificial Intelligence is nothing more than the development of extremely complex algorithms, originally from the trading rooms, and which is becoming widespread to many applications outside the initial framework. . Two major topics arise from this:
- What about the emotional and non-purely mathematical aspect of Finance? There are many theses that argue that market reaction can not be explained simply by mathematics and that the irrational is an integral part of decision-making;
- Secondly, a basic subject that is related to the first: from the moment we have these algorithms that will extend to more and more applications, what about the protection and security of data? But this last subject far exceeds the only area of the FinTech since the data is rightly considered as the first world raw material in front of the oil!