Breaking Banks
Episode 497: Highlights From Finovate Spring & Spotlight: KakaoBank
Thu Jun 08 2023Description
Finovate Spring took place in San Francisco with high-quality demos showcasing cool technologies. Meta and AR-based demos were discussed, and Debbie partnered with MSU Federal Credit Union. Best of Show winners included FlyBits, One Cosmos, Nine Spokes, QuickFi, Savvy AI, and Wink. AI trended at FINA, focusing on self-service and customer choice. Tech integration and conversational banking were highlighted, along with the importance of networking and managing technology risks. The podcast covered contextualized credit experiences, Apple's announcement, upcoming events, and Kakao Bank's journey in Korea. Kaobank is adapting to new technologies and monetizing through loan sales and platform operations.
Insights
AI Trend
AI was a clear trend at FINA, both in demos and on stage.
Customer Service
Customer service is an easy use case for AI but still needs improvement.
Tech Integration
Smaller financial institutions lack resources for tech integration with fintech companies.
Conversational Banking
Integration with messaging platforms like Kekal Talk, Tencent, and WhatsApp shows promise in conversational banking.
Generative AI
There was a lot of talk about generative AI and its possibilities in financial services.
Networking
Networking at the event felt like hanging out with friends.
Technology Risks
Two big misses at the event were companies building personalized AI for consumers and a demo from Matt vs. Sans.
Contextualized Credit Experience
The podcast discussed the progression towards a more contextualized experience of credit, moving away from personal loans and credit cards.
Kakao Bank's Journey
Kakao Bank started with only four people and became a joint venture with Kakao and K-I-H. They focused on solving problems users experienced with other banking applications and created attractive products with unique features.
Kaobank's Adaptation
Kaobank is preparing to adapt to new technologies by collaborating with big tech companies like Apple. They aim to become the number one retail bank and platform for selling all financial products.
Chapters
- Finovate Spring
- Meta and AR-based Demos
- Debbie and Best of Show Winners
- AI Trend and Customer Service
- Tech Integration and Conversational Banking
- Finovate Format and Generative AI
- Networking and Technology Risks
- Contextualized Credit Experience and Apple's Announcement
- Kakao Bank and Technology in Korea
- Kaobank's Adaptation and Monetization
Finovate Spring
00:06 - 07:14
- Finovate Spring took place in a new venue, the Marriott Marquis in San Francisco.
- Attendance was slightly affected by recent industry happenings, but the quality of demos was high.
- The companies that demoed showcased cool technologies and had to meet higher standards due to increased competition for VC funding.
- New additions to Finovate Spring included scholarships for ESG-focused and diverse-founded companies.
- Themed demo sessions were introduced, grouping demos based on who they serve rather than the technology itself.
- Flybits was a standout demo, impressing with their visualization of the metaverse concept.
Meta and AR-based Demos
06:55 - 14:03
- Meta was a topic at FINA, and it was impressive.
- AR-based demos are predicted to increase next year due to the release of Apple's new smart glasses.
Debbie and Best of Show Winners
06:55 - 14:03
- Debbie, a startup that rewards people for paying down their debt, partnered with MSU Federal Credit Union.
- The Best of Show winners were FlyBits, One Cosmos, Nine Spokes, QuickFi, Savvy AI, and Wink.
- Wink's CEO, Deepak Jain, previously won Best of Show with a different company called Switch.
- Wink solved the password problem in a user-friendly way and is worth looking out for.
AI Trend and Customer Service
06:55 - 14:03
- AI was a clear trend at FINA, both in demos and on stage.
- Institutions discussed concrete examples of how they use AI for self-service and providing consumers more choice.
- Customer service is an easy use case for AI but still needs improvement.
Tech Integration and Conversational Banking
13:42 - 20:48
- Smaller financial institutions lack resources for tech integration with fintech companies.
- Fintechs are creating solutions that are easy to implement for smaller FIs.
- Focus on credit unions and local banks to make them competitive.
- Fintechs talk about their tech stack instead of core systems.
- Tech stack agility is crucial for integrating AI and other technologies.
- Industry needs to focus on end users, including smaller financial institutions.
- Ability to connect with a human in moments of panic is important in customer service.
- Charlie, a new bank in the US, offers the ability to contact a human as a competitive distinction.
- Integration with messaging platforms like Kekal Talk, Tencent, and WhatsApp shows promise in conversational banking.
Finovate Format and Generative AI
20:20 - 27:17
- Finovate format continues to evolve but demos remain at the center of the experience.
- There was a lot of talk about generative AI and its possibilities in financial services.
Networking and Technology Risks
26:56 - 34:08
- The conference was a great value and had good quality presentations
- Networking at the event felt like hanging out with friends
- Being back in person and seeing familiar faces was energizing but exhausting
- The layout of the event forced connections and led to striking conversations
- There were more people in suits than usual, possibly due to the presence of banks
- AI-powered startups may have lower barriers to entry and could do interesting things
- Two big misses at the event were companies building personalized AI for consumers and a demo from Matt vs. Sans
- By now, pay later was not discussed enough, and there should be more focus on the risks of certain technologies
Contextualized Credit Experience and Apple's Announcement
33:41 - 41:15
- The podcast discusses the progression towards a more contextualized experience of credit, moving away from personal loans and credit cards.
- There was little discussion about Apple's recent announcement regarding savings accounts.
- Opening an account with Apple was fascinating but still clumsy compared to other platforms like UiBao and L.A. Pay.
- Impulse savings have been possible for years, so the US and European markets are behind in terms of innovation compared to China and Lattam.
- Upcoming events include Finovate Spring, Finovate Fall, and the Finovate Awards.
- Theo will be doing a book signing for his new book called 'The Metiverse Economy' at Finovate Fall.
- 'Breaking Banks' and 'Official Finovate Podcast' will take a break before returning with an interview with Daniel Yoon, CEO of Kekow Bank.
Kakao Bank and Technology in Korea
40:57 - 50:21
- Most of the cacao people were against my opinion of starting a fintech company under cacao pay.
- Persuaded them that to run a bank business, we needed a license.
- Started Kakao Bank with only four people and got the license.
- Kakao Bank was a joint venture with Kakao and K-I-H.
- Korea had not seen a new bank in 26 years, but seeing challenger banks around the world inspired me to start Kakao Bank.
- Korean people were sensitive to technology standards and there was a gap between high-end applications and banking applications, which presented an opportunity for us.
- The convenience and design elements of our app made it easier for people to manage their money through the app.
- We focused on solving problems users experienced with other banking applications.
- Our vision was to create attractive products for our users and keep differentiation in the market.
- Unique features of Kakao Bank include the global account and group account options.
Kaobank's Adaptation and Monetization
50:00 - 58:34
- Korea has been advanced in web-based technologies, with companies like Samsung leading the way.
- Apple is about to launch smart glasses and there is an increasing use of artificial intelligence in voice interactions.
- The introduction of these technologies will impact banking, and Kaobank is preparing to adapt by focusing on accessibility and cost.
- Kaobank plans to collaborate with big tech companies like Apple to provide access to their technology.
- Kaobank has a separate identity from Kekao, aiming to provide a different user experience through its independent clock application.
- The bank has been profitable since early on and uses two monetization models: selling loan products and operating as a platform business.
- As a platform, Kaobank sells other companies' financial products on its application, aiming to become the number one retail bank and platform for selling all financial products.
- The average loan size for Kaobank's lending products varies depending on the category, with over 10% market share in some areas.