Banking services “unbundling” in fintech market

By David Beach | 2 October 2018

At the recent Amazon Web Services FS Insight conference, Jonno Southam, venture capital business development manager at AWS led a panel with Jai Juneja, head of tech investment at Seekventures and Kartik Varma, co-managing director at the Barclays Accelerator. The conversation focused on how fintechs are investing, as the panellists identified a changing paradigm in which market participants are making their banking products all the more niche. 

“We’ve seen a theme around the unbundling of banking services,” said Juneja, explaining that the majority of fintech propositions so far have been customer facing, intended to improve customer experience.

“But there’s still a lot to do with enterprise and infrastructure investments,” he said.

When it came to what those areas of infrastructure investments look like, Varma offered: “blockchain is changing the world of finance. Legal titles to property, tracking votes in elections and trade finance. Elsewhere, machine learning patterns are being used to form trading algorithms. These are the two big trends we’re recruiting in.”

Juneja was quick to agree, adding: “We’re moving into a period where blockchain can completely disrupt clearing but we’re very early in that cycle. As an investor, we’re taking a backseat to see how that progresses. It’s hard to know if it’s customer or enterprise ready at this stage.

Despite this, Varma did not believe that would be a hindrance.

“As a consumer, I don’t need to know what a platform is built on. If a company tells me that their service will guarantee my total legal ownership of a property I can trust it, regardless of if I know its blockchain. I think the magic is in the consumer not necessarily understanding what’s going on but feeling safe using the service” said Varma, hinting that customer buy-in doesn’t necessarily need to come from the product, but the service.

And the tech stack is increasingly attracting potential investor attention at earlier funding stages.

“Companies should be thinking of their tech stacks from day one, particularly with how important data is becoming. They need to think about the architecture, how they structure and label data for business longevity,” said Juneja.

“Increasingly, investors are performing more due diligence on tech stacks further down the line,” said Varma “If you’re a Series B or Series C, then it might impact funding if a flaw in the tech stack is flagged up that might compromise scalability for instance.”

Become a bobsguide member to access the following

1. Unrestricted access to bobsguide
2. Send a proposal request
3. Insights delivered daily to your inbox
4. Career development