Innovation in Financial Services

This week, I attended the Money 20/20 Hackathon & Money 20/20 conference seeking to better understand technologies disrupting the financial services industry and assess opportunities for startups and investors.

At the hackathon, over 500 people participated and 100 projects competed for $125,000 awarded to 10 winning teams. Sponsors like VISA induced teams to compete for their prizes by incorporating their APIs and technologies into innovative projects.

My team (EATS) set out to change the way people dine out by making it a more delightful experience from check-in with the host to ordering from a visual app menu to settling the tab with Ingenico’s mPOS card reader. We weren’t selected as a finalist, but I was impressed with the state of technologies, the ease with which they could be integrated into products or services and what smart minds could program in 24 hours of focused coding activity. It was also fun to be on a team and build a product, thanks Tim and Jason.

The hackathon winner was Clever, featuring Amazon Alexa:

“Clever is a personal voice-enabled assistant that uses Alexa to help merchants answer the most important questions about their business. We solve the pain of too much data and not enough insight – all in less than 30 seconds! For example, merchants can ask Clever for: 1. Reporting on your top selling and spending categories 2. A summary of your business performance vs. historical data 3. Recommendations for offers that can benefit your business Clever uses transaction-level sales data and aggregates that merge into top categories to give merchants an idea of where their costs are coming from. Using this historical data, we create a mapping and ranking for relevant credit card and promotional offers that would save money for the merchants. Clever can even use existing information to pre-populate credit card applications. By creating a seamless end-to-end experience, Clever helps merchants to manage their business intuitively by speaking to Alexa, freeing up more time for them to run their business.”

My favorite pick from the hackathon was Warren, they leveraged both Amazon Echo and IBM Watson’s AI sentiment tool:

“Warren is your very own personal investment advisor. Every day, Warren will prepare a short update for you on how your portfolio is doing and identify ways you can make smarter investments. Warren connects to various sources of information including Facebook for social data, for financial data, Xignite for market news, and Robinhood for ticker data. Warren crunches the numbers and uses IBM’s Watson to analyze sentiment about the company to give real-time, accurate, and personalized investment advice. Warren makes heavy use of the Visa Direct API to connect financial institutions enabling users to move money between their accounts.”

Another finalist made a neat app that incentivizes kids to practice music through intelligent microtransactions that keep track of how much they practice as well as how well they play. Each practice session rewards the student for good practicing, trying to inspire him or her to make consistent progress.

The general conference kicked off with a series of quick 20-minute moderated keynote sessions from big players like Alipay (can you say 450 million users and $14.3 billion processed payments on a single day in 2015), Google, Square, and PayPal (announcing integration with Facebook messenger).

The conference also held a startup pitch conference called StartupPitch180 featuring a batch of early stage and late stage companies.

There are a dizzying array of companies competing in this large market but as a consumer, I just want one preferred payment method that consistently rewards me in a personally meaningful way (with both discount on purchases and cashback). From the merchant’s perspective, they want frictionless commerce for the highest conversion rates and of course, they want the lowest possible fees.

There were lots of other exciting discussions on Blockchain technologies and how companies like Chain can securely transfer assets. Additionally, there many sessions and vendors addressing risk security and fraud.

It is an exciting time to see all these technologies collide and I’m optimistic that many multi-billion businesses will be built. After all, VISA handles a mere $7 trillion dollars of annual global charges alone! And as JP Morgan Chase CEO Jamie Dimon indicated in the recent annual report, “Silicon Valley is coming. There are hundreds of startups with a lot of brains and money working on various alternatives to traditional banking.”

hehman-headshotDavid Hehman, Chairman, Spartina, Inc.

David Hehman is a lifetime entrepreneur and an active early stage technology investor. Mr. Hehman received a BA from UC Berkeley in December 1992, and an MBA from the Haas School of Business in 1998. David covers start-ups and Venture Capital sectors for Gigaom.