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Money 20/20: engaging in key innovation conversations

08 Jul 2022

Billed as Fintech’s biggest conversation, Money 20/20 Europe, held in Amsterdam last month, was an excellent opportunity for Daniel Shorr, Edinburgh Innovations Senior Strategic Partnership Manager, to contribute to the conversation.

Daniel seized the opportunity presented by the in-person conference to introduce the University of Edinburgh to banking titans as well as leading fintechs.

Ecosystem colleagues from Fintech Scotland, Scottish Development International, and the UK Department for International Trade together presented a compelling and multifaceted value proposition to potential partners.

At the conference, more than 350 speakers discussed numerous hot topics. Some of the key themes most discussed were cryptocurrencies, sustainable finance, payments and embedded finance, open banking and the current, challenging macroeconomic climate. In all of these areas, the University of Edinburgh has world-leading academic research expertise and is open to collaboration with industry partners through innovative approaches such as our industrial PhD in FinTech programme, short-term projects, and strategic long-term partnerships.

On cryptocurrencies, speakers highlighted increasing regulations (e.g., taxation, risk requirements), experimentation in new applications of distributed ledgers (e.g., insurances, non-fungible tokens [NFTs], identity management), and continued mainstreaming (e.g., issuance of Central Bank Digital Currencies) despite ongoing market volatility. Speakers noted the recent shakeout could even be a good thing in forcing the industry to focus on delivering real value beyond being a vehicle for financial speculation.

Sustainable finance, an area of considerable expertise at the University of Edinburgh, was another key topic. This discussion focused on the massive shift towards sustainability currently underway across all industries, including finance. Numerous major banks and institutions (European Commission, UN, etc.) have offered frameworks for taking environmental, social and governance (ESG) considerations into account when making investment decisions in the financial sector. However, there is an open question and much work to do towards a standardised framework for ESG.

Payments and embedded finance were also key focal points, particularly the growing proliferation of Buy Now Pay Later (BNPL) and the need for better support for an aggregate view for customers across their participation in multiple BNPL schemes. Account-to-Account (A2A) payments are expected to account for 20% of all European e-commerce payments in Europe by 2023 according to the Worldpay Global Payments Report, surpassing card payments. Payment data offers deep insight into customer behaviours and needs, which presents an opportunity to deliver personalised services as long as privacy regulations (e.g., GDPR) can be navigated appropriately.

The last area of particular interest was open banking. The UK and EU continue to lead in setting industry standards in this space which has facilitated innovation, especially with the implementation of the Payment Services Directive (PSD2). While the extent of participation by many incumbents has been underwhelming, fintechs like Stripe and Wise are using the framework to delegate authentication across each other’s platforms to streamline the customer experience.

Of course, no topic can be considered in isolation from the challenging macroeconomic conditions we are currently experiencing. Geo-political conflicts, COVID lockdowns in China, inflation, rising interest rates, ongoing supply chain issues translate into a harder fundraising environment for all fintechs. Valuations have sunk, profitability is the new emphasis (vs. customer acquisition at all costs), and investors have regained power. Layoffs, failures, and M&A activity are all expected in coming months.

Enterprises with the financial strength to invest during this market downturn in innovation will be best positioned coming out the other side to adapt and gain market share.

The University of Edinburgh is a powerhouse institution ranked 15th overall* and 5th globally for industry, innovation, and infrastructure**. We are experienced in co-creating strategic partnerships with large financial enterprises and assembling top researchers across disciplines to address real-world challenges and opportunities.

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Contact Daniel Shorr to discuss how our capabilities can help you to develop new solutions and shape the future of financial services.

Discover the University of Edinburgh’s fintech expertise:

*15th globally in 2023 QS rankings

** 5th in the world for industry, innovation, and infrastructure (Times Higher Education Impact rankings 2022)

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Daniel Shorr

Senior Strategic Partnership Manager