This month at The Fintech Times our focus switches to reflection as we look back at developments over the last 12 months. 2022 has certainly been a challenging year for everyone with global economic activity experiencing a severe slowdown, with inflation higher than seen in several decades.
We posed the question – ‘What lessons have you learned from 2022’ – to The Fintech Times community. Over the following two weeks of December, we’ll share their views. Today brings you the lessons learned for leaders at SigFig, IDA Ireland, IBM, Nexi, Republic Capital, Esker and Akamai.
Mike Sha, SigFig
Sha leads SigFig, a US-based enterprise financial technology firm that develops next-generation products for financial institutions, advisors, and their customers.
“While financial institutions are making clear investments in technology, client experience software requires not just trade software acumen, but really amazing design work, product work, and everything that tends to make consumer-focused products attractive and easy to use.
“That DNA has not always made its way into enterprise software. There is still a huge opportunity for fintechs to lead in the area of user experience, even in the B2B space. Fintechs can use an innovative and nimble approach to creating client and provider shared software that feels much more modern, and much more dynamic.”
David Gaskin, IDA Ireland
Gaskin is the vice president and head of financial services Western USA for IDA Ireland, the Irish Government’s economic development agency responsible for attracting foreign direct investment to Ireland.
“Companies looked outside their zip code – way out – In 2022, fintech firms threw out a much wider net to find the skilled workers they needed. Some of these prospective employees worked from home, but other options were successfully adopted, including establishing an overseas operation in a location with a supply of tech talent that was easily connectable to the mother ship.
“For example, Remitly Global, a Seattle-based digital financial services provider for immigrants and their families, staffed up a new fraud and compliance centre in Cork, Ireland, hiring 120 people to support its recent rapid growth. Collaboration between companies, government agencies and academia was a major draw.
“In most cases, hiring skilled fintech workers outside the United States cost less than in many domestic locations. To zero in on some optimal places, fintech companies looked at GDP growth per capita, which enabled the selection of stable, thriving locales. Topping the list in 2022 were Luxembourg, Ireland and Singapore, with the US coming in fourth.”
Matt Lewis, Republic Capital
Investment analyst at at Republic Capital in New York, Lewis is focused on identifying equity investment opportunities in deep tech companies.
“This year has shown us that the influx of cheap capital, especially to fintech over the past decade, has come to an end. Public fintech valuations fell a median 49 per cent year-to-date, according to Republic Capital’s internal fintech comp set via Factset. This contraction is just beginning to flow through private markets.
“All of this is forcing companies to go back and ask themselves the fundamental questions: what are we good at and how will we continue to succeed? There are still an innumerable amount of amazing companies and founders and the ones who have and continue to weather this economic storm will emerge stronger than before.”
Prashant Jajodia, IBM
Jajodia is managing partner and financial services sector leader at IBM UK & Ireland.
“In 2022, the fintech industry started to recover from the impacts of Covid-19, but the onset of high inflation and interest rates is drying up funding and the sector is moving into 2023 under difficult circumstances.
“At the same time, financial institutions have been deepening their digital transformations and adoption of hybrid cloud and Artificial Intelligence to make sure their innovation keeps pace with customer expectations. Banks’ insatiable appetite for innovation has continued to create opportunities for fintechs, particularly for those that help banks to enrich the personalisation of their offerings.
“During the pandemic, banks ramped up their use of capabilities that supported expanded digital banking services, such as AI-powered virtual assistants. Now, there’s a growing focus on applying AI and machine learning capabilities to customer data to develop hyper-personalised solutions, such as automatic nudges that help people save money and make smarter financial choices. As people feel the effects of high inflation, offerings like this will be especially appreciated by banking customers.”
Richard Meeus, Akamai
Meeus is cybersecurity company’ Akamai’s EMEA director of security technology and strategy. With more than 20 years of experience, Meeus is responsible for designing and building security solutions for some of the world’s most influential organisations.
“This year has marked a real turning point for businesses and consumers alike. The retail sector saw a 264 per cent surge in ecommerce ransomware attacks. Our research has shown that the majority of online shoppers (76 per cent) expect retailers to invest heavily in security, half (49 per cent) don’t currently trust retailers to keep their personal details safe, and 59 per cent said they would stop shopping at a retailer if it was a victim of a cyberattack.
“When it comes to the FS industry, recently released Akamai data shows that it is in the top three most attacked verticals when it comes to web apps and APIs. We fear that, as fintech and traditional finserv continue their investments in open banking with the ultimate goal of facilitating a more streamlined experience, the overall attack surface is expanding. From October 2021 to October 2022, Akamai saw the volume of web app and API attacks on the industry surge by 257 per cent.
“A key takeaway from 2022 is that cybercriminals are focusing on optimum ways to increase their revenue and the concept of having minimal internet presence no longer means you are immune to cybercriminals.”
Steve Smith, Esker
As US chief operating officer at Esker, Smith is responsible for all operations in North, South and Central America. Esker is a global cloud platform and automation solutions company.
“The biggest lesson learned this year is that there is a stark difference between the companies that want to implement automation solutions and those that actually have the tools, IT talent and resources to do it.
“This looks different for every customer, but we’re learning to help our customers identify their largest barriers to adoption and then provide them with customised change management solutions and the best support possible so implementation runs smoothly — especially for those industries resistant to change or that lack the practical resources to make implementation a success.
“We’re also learning more about how customers are grappling with the rise of cyberattacks in the past year. We’ve noticed when negotiating with customers for any particular solution, the questions around security are getting far more complex than ever before. For any solution, their number one concern is ensuring they have the proper protections in place to fit their unique needs, so our teams are learning how we can best customize our solutions to meet those vastly diverse requirements.”
Tommaso Jacopo Ulissi, Nexi
Ulissi is head of business strategy for European paytech Nexi Group.
“We as Nexi have seen mobile payments transactions booming in 2022 by 185 per cent compared to 2021 and, by the end of the year, mobile payment value will reach €445billion at European market level. Also in 2022 we had a confirmation that the speed of adoption of new solutions, if they are designed to solve customer problems and address merchant needs, is huge.
“For example, SoftPOS technology, tailored to provide additional opportunities for merchants to accept payments with increased flexibility and convenience simply from their smartphone devices, has proven this true.
“We already know that SoftPOS can provide customers with a streamlined and flexible shopping experience where they do not need to queue at a specific Point of Sale, while facilitating the merchant by freeing up staff from cash registers to focus on enhancing the customer experience.
“However, one lesson that we have learned from this year is that SoftPOS solutions can also be used to mitigate the impact of a cyberattack. When one business was attacked this year, it was able to quickly pivot to SoftPOS devices so it could continue serving customers and taking payments.
“Without the reliance on dedicated hardware, rollout can take place much more quickly and at a minimal cost to normalise payment acceptance. This brings even more versatility to an already flexible and simple solution, especially as a companion or as a back-up device for sophisticated merchants.”