Amazon Is Banking on Unbundling: Five Takeaways from Future of Fintech

CB Insights’ Future of Fintech conference was a star-studded event. Built around “fireside chats” with the industry’s leading minds, the conference had a uniquely intimate atmosphere.

For those who couldn’t make the trip (or are just curious), Basis Technology COO Steve Cohen shares five key takeaways:

1. The unbundling of financial services

Anand Sanwal of CB Insights on Amazon vs Banks

In his keynote, Anand Sanwal of CB Insights explained that Amazon is “unbundling the bank” by providing clients with a number of distinct, separate financial services.

I think this point is critical. Over the last 50 years, financial services providers have used service bundling to increase their revenue. This was a natural move. As a company hits the growth limit on a particular product they then add new, related products. However, the internet, mobile technology, and the attitudes of the millennial consumer have moved against bundling, motivating Amazon and other providers to offer financial services solutions a la carte.

There may be an opportunity here for single provider to create a marketplace around these separate financial services. This would give consumers the advantages of best of breed solutions as well as the ease and simplicity of a single stop. Check out Sanwal’s full slide deck here.

2. AI is overrated…and underrated

During each chat, the interviewees were asked to rate a series of different firms, technologies, and trends as overrated or underrated. While this set differed session to session, “AI” and “blockchain” were almost always in the mix.

While I wasn’t necessarily expecting a consensus, it was interesting to see how divergent opinions on these core technologies are. To me, this is really a consequence of how poorly developed each of these concepts are. Detached from a particular application, “AI” doesn’t mean much. Neither does “blockchain.” They both can be spectacularly effective or a complete disaster—the problem space is everything.

3. Incumbents are thinking like fintechs

The large fintech companies and the old guard are focused on two major changes: customer approach (including customer acquisition and customer interactions) and cost. It’s impressive—albeit expected—when these are the talking points of firms like Wealthfront and Robinhood.

What’s even more impressive is that Goldman Sachs and Fidelity are making the same points too.

4. Female fintech leaders “lean in” and “own it”

For me, this conference was dominated by female speakers. In particular, NASDAQ CEO Adena Friedman and Ellevest CEO Sallie Krawcheck stood out, both as leaders and speakers.

As the leader of an organization as established and highly regulated as NASDAQ, Friedman is constantly faced with the challenge of finding a balance between innovation and stability. She discussed the immense value of new approaches like machine intelligence and cryptocurrency, tempered by realistic problems of applying them.

Krawcheck walked us through her journey and goals at Ellevest: helping women better handle their financial needs. Through the process of thinking about smarter approaches to financial management, she came the realization that both men and women need better solutions for thinking about and managing their financial needs. And made it her mission to provide them.

I walked away from both talks hopeful about the inroads female leaders are making into a space that has historically been dominated by men.

5. Finance is getting fast (finally)

Speed of innovation was a central theme in a number of the talks.

Going by history, rapid innovation and finance don’t overlap all that much..or at all. But we may be approaching the last days of that cliche. Fintech companies are showing that rapid, consumer-type innovation is useful and desired in finance—and the industry is listening.