A year after Spiros Margaris last spoke to bobsguide, we invited him back to see whether his predictions for 2017 had come true.
We also talked about whether ageism is an issue in fintech and what exactly is needed to make a successful startup, as well as which ingredients make the best technologies.
You’ve been named fintech’s most influential voice in countless tables - does this confine you to a consultancy role? Would you consider revisiting your start-up past?
I’m invested in several startups but I wouldn’t want to pursue a more hands-on role. Part of that is because I enjoy contributing my opinions but my current schedule would restrict me from committing to the day to day tasks required to make a success out of a startup. It’s much more interesting for me to be advising companies, keynoting at conferences and generally evaluating startups.
Social media is also a big part of what I do. The platform I use the most is Twitter and I generally comment on fintech, insurtech and AI. My Twitter reads average 4.5 million a month. And that hasn’t happened by chance, I put a good 3-5 hours a day into reading and curating good content on Twitter. It’s also how I stay up to date, do my research and compare my opinion to others’ so those hours are really rewarding. And of course, all this success I enjoy would not be possible without the great fintech and insurtech community that very generously supports me in so many ways. I am very grateful to be part of such a fantastic group of fintech and insurtech people.
Looking back on your previous article, you indicated that insurtech would grow this year. Has it and how?
Absolutely, and it has! Insurance hasn’t been as digitalised as banking, nor has insurance had to improve the frequent customer interactions that banks have; insurance has really been a pay-as-you-go utility service.
We’ve seen a bigger push on the customer centric approach which has informed the technology, but that’s not to say that’s what has made the insurtech companies popular; you won’t be successful purely on a customer centric approach unless you can add value to the experience. I think a lot of insurance companies take customers for granted but insurtech startups can’t. They don’t have the same customer base as larger companies and so need to appreciate and care for the ones they do have. The question becomes, how do I, as an insurance startup, keep my customers happy?
Technology is of course an enable of providing customer centric services, of improving the customer experience. Not only that, but if you can automate some backend tasks, such as paperwork, you can free up time to focus on the customer.
In your previous article, you tipped big data and AI to come into their own this year, are these the technologies you are referring to?
Certainly AI and machine learning have become more and more relevant this year. Big data is trickier, as you have to differentiate between rich and poor data from huge datasets.
The financial services are definitely taking the task of finding rich data seriously, largely because the company with the richest data has a competitive edge. Rich data is really the fuel of the great engine called AI machine learning. If you want to reap the rewards of AI machine learning you need to first focus on that big data.
Where are you most excited to see AI/Machine Learning go in the future?
In fintech and banking it will be put towards recommendation engines. When I get asked about predicting trends for 2018, I always say that there will be no specific technological trend. It will be more like cooking, where blockchain and AI are separate ingredients that the chef of the future will mix together and create something new and innovative. That’s what the future will be, cross collaboration between the capabilities of the emerging technologies.
If you look at the past, 100 years ago electricity was a competitive edge and now everyone has it in abundance. AI will be the same, everyone will be using it like a utility.
In your previous article, you spoke about how 2017 would see an increase in acquisitions and partnerships between big banks and fintech startups. Will we get to a point when the incumbents will hold all the cards?
The big banks are partnering more than acquiring, it’s a question of culture. There’s this belief among some banks that there’ll be a tipping point where the fintech startups will disappear, because they won’t be able to swim in the new financial markets or realistically compete against the incumbent banks, either on the customer front or by offering anything other than a good customer service.
But I don’t think that is going to happen, what if startups could leverage technology to offer a zero fees model? Models that offer free services paid for entirely by advertisements. Robinhood is a good example of a startup that offers free stock trading and challenge incumbent, fee charging platforms. What happens when someone in insurtech can model by this format? What will that do to the industry? It’s inevitable, fees will go to zero, write this down.
Do you think that age plays an important role in fintech and insurtech?
Not as much as some people might expect. We’re used to this idea of startups filled with young millennials in shorts but, in insurtech in particular, it pays to have a little more experience and connections with the established insurance industry.
I think quite simply it comes down to having less risk - starting a company from scratch is better suited for someone who is risking less, and they tend to be young people. They don’t have the same considerations - they often don’t have a mortgage or a family, and they have much less to lose should it go wrong.
But overall, I think that a great fintech company really benefits from a mix of young thinking and old experience - that’s a powerful combination. At the end of the day, it doesn’t matter about age. Most businesses don’t project their thirty year plan, it’s more 5-7 years, so what difference does it really make if their young or old? At the end it’s about talent and drive.
Do younger people have a better understanding of technology?
Yes, obviously, because they’ve grown up with it but does that doesn’t necessarily mean they have a competitive edge. For instance, I can’t programme a thing but I know who can do it, what to do with it, and how to sell it. When I was much younger, I enjoyed photography. I couldn’t develop the pictures in the dark room but I understood how to take good pictures. Of course, if you have a knowledgeable executive who is also a programmer, brilliant, but you can’t build a business only on one skillset.
I would go one step further and say that the success of a lot of startups is based on timing, long before you even consider the team and the technology. There were successful companies that did what Facebook did, but Facebook was there at the right time and executed well. In Mark Zuckerberg's case, he had the three things I’ve mentioned: great timing, technological understanding and good execution.
Some people say fintech is a young person’s game, but you cannot exclude older people who might have great experience who quite simply, think differently. As consumers, the one thing that older people tend to have more of than younger, is capital. You need to understand how to provide services, how to attract their investment, which is all the more relevant for the challenger banks looking to capture multiple generations. On the other hand, understanding the older generations is irrelevant for a company that caters exclusively to the young, like Snapchat. But fintech and insurtech need that understanding, and that understanding comes from having the right balance of age and gender diversity.
Going back to the first question, how can your experience in fintech, as well as being an influencer, help young startups?
I recently joined the advisory board of Glance Technologies, a listed Canadian fintech company that has a fantastic payment app called Glance Pay. Glance Pay are bringing an innovative approach to paying restaurant bills. You simply take a picture of your bill and the company’s IoT network works out what it’s looking at, sets up the payment channel and then you can leave without waiting around. This frees up the waiters and the owner can turn over more tables. It’s cool.
Since my advisory board announcement on September 27, 2017 on Twitter their stock price (CES:GET) grew by almost 600% as of December 4, 2017. That wasn’t because of my ‘innate popularity’, because these guys (Desmond Griffin, Penny Green and all the great team that make it all possible), were and are doing a really great job, they just needed someone to tell the world - that’s where influencers come in. People might not buy, but they’ll certainly listen to me and that is the platform that Glance Pay deserves.