The fintech revolution and you

20 Nov 2017

Image: Rzoze 19/Shutterstock

Fintech has the potential to be one of the most empowering shifts to emerge from this chapter of the digital age, writes John Kennedy.

History has sadly taught us that the most rapid technology upheavals and revolutions occur during wartime. The First World War saw an acceleration in the development of airpower, a technology only in its infancy at the time, as well as radio communications. The Second World War heralded the atomic and jet ages. The Cold War actually gave us the internet because it was originally conceived as a way for bunkers to communicate in the aftermath of a nuclear strike.

It’s difficult to sum up the times we live in today, and maybe only by looking back some day through the lens of history books, will we truly understand it all. Are we at war or peace? It depends. There is a war on terrorism and a war by terrorists on the West’s ideas of freedom and safety. There is the sabre-rattling by the leaders of the US and North Korea, each of whom has a questionable grip on reality. And, with Brexit looming, the UK’s departure from the EU threatens to destabilise the single most successful experiment in peace and trade ever seen in Europe for hundreds of years.

Technologically, with most of the world’s population now carrying smart devices, humanity supposedly has never had it so good. Or has it? Social media has broadened our understanding of the world and the glaring injustices in terms of economic privileges enjoyed by a few, and the sad reality is that racism and prejudices are as alive today as at any point in our past.

I always try to seek the silver lining in any cloud and, for all the ugliness that our enhanced perception of the world around us reveals, we live in a time of unprecedented opportunity as well as challenge.

The internet is a great leveller in terms of opportunities to start businesses and to be educated – for example, the world’s biggest encyclopaedia, Wikipedia, exists in close to 300 languages and is free. Now, millions of people in Africa or elsewhere who never held a bank account before can do so, thanks to mobile phones.

Whatever history will define this time as, I hope it is a time of empowerment for people, especially financially, and not the start of a dystopian age where AI overlords threaten to take away the basic dignity of a job, or where one or two tech giants and their armies of overpaid geeks live it up selfishly and lavishly behind the walls of their secure ivory towers.

Power to the people

Fintech is perhaps one of the most defined opportunities that the collision of the internet, smartphones and AI could present to empower people and make a difference.

My hope for humanity and instinct that people may do the right thing was given a kind of a boost recently when I was a judge at Startup Weekend’s fintech edition at Bank of Ireland’s new fintech-centred Startlab on Camden Street. Seven start-ups presented and I was impressed by a common thread that ran through all of the ideas devised by people who, 48 hours earlier, were total strangers: all of the ideas were designed to help people and remove frictions.

The winning start-up had devised a platform that would promote transparency and enable carers to make financial transactions safely on behalf of people in care. With the right data security and UX, that is an idea that could fly as the western world’s population ages and these practicalities matter more and more.

The relationship between banks and people is changing. Branches are morphing into business and community hubs. Behind the counter, tellers who used to do humdrum transactions are being replaced by a more consultative model or machines, and the transactional power sits on your smartphone rather than with the branch manager.

Shifts in capability ushered in by smartphones and AI are leading to the establishment of neobanks such as N26, Monzo and Revolut, while new technologies such as blockchain afford banks the ability to maintain legacy systems and apply a more modern digital veneer, as in the case of a proof of concept by Bank of Ireland and Deloitte last year.

The use of blockchain is (rightly or wrongly) unleashing new ways for entrepreneurs to raise funding via initial coin offers (ICOs) by creating currency for investors. Already, ICOs are reportedly delivering more funding than equity rounds but it remains to be seen if these represent a safe future for investing or could be the Dutch tulip auctions of our times.

In the eye of the storm

The empowerment of people to do in a heartbeat what used to require a physical visit to a bank branch is revolutionary, and Ireland is on the frontline of developments in this area.

Irish brothers Patrick and John Collison have built Stripe, a $9bn digital payments colossus in San Francisco, and are among the investors in European neobank Monzo, which has 500,000 users and has achieved cult-like status in the UK. In many ways, Stripe represents the ultimate fintech player in terms of not only enabling e-commerce payments for merchants, but clever automation tools such as Atlas, which remove the frictions of getting a business trading in the US, for example, or administrative tasks such as issuing employees with stock.

Earlier this year, I spoke with Bank of Ireland’s head of group operations and payments, Vincent Brennan, about the open banking revolution and how, driven by the forthcoming Payment Services Directive 2 (PSD2), open banking enables banks to put the customer at the centre of their future strategies. This is driven by the fluidity of APIs and processes such as ‘know your customer’, which give consumers greater power over their personal data and financial assets.

Right now, consumers are empowered. For example, Dublin-headquartered Circle has created a peer-to-peer payments platform that lets people within Europe and the US send each other money using its app or the iMessage function on their iPhones.

The aforementioned Camden Street is becoming something of a fintech district, and is home to players such as Charles Dowd’s Plynk, which lets you send cash via message or by in-group chats, as well as Deposify, which looks after rental deposits on behalf of tenants and landlords. The street is also home to Chasing Returns, a start-up applying emotional intelligence to investment decisions. Plynk, Deposify and Chasing Returns have all featured as Start-up of the Week firms here on

Dublin is also home to KBC’s innovation hub, which recently developed a new banking app that lets users open, activate and use a KBC debit card within minutes on their smartphone.

This morning (20 November), we reported how AIB has invested €30m in fintech player TransferMate, a company that has enabled the transfer of more than $10bn to more than 100 countries worldwide. It is a strategic bet on a post-Brexit digital world by an Irish bank.

In recent weeks, we also reported how Bank of Ireland is helping firms to get fintech-fit by joining forces with a US fintech company called WorldFirst to launch a new international payments service in the US, which enables fast and safe payments with no transfer fees.

With Brexit looming, and all the confusion that will be left in its wake, the ability for people and businesses to trade fluidly on a global basis could be one of the most empowering aspects to emerge from this chapter of the digital age.

And, hopefully, there is a silver lining in the stormy clouds that are gathering.

It is Fintech Week here on, so stay tuned for a range of insightful articles on what exactly is happening in fintech and how it affects you.

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John Kennedy is a journalist who served as editor of Silicon Republic for 17 years