A year ago, the second European directive on payment services (DSP2) entered into force on 13 January 2018. This text, which aims to modernize payment services, obliges banks to make their customers' data available (subject to their agreement, of course) to third parties. , as account aggregators. Julien Maldonato, director of the financial industry at Deloitte, describes the trends that should mark the world of fintech in the coming months in this particular context.
THE TRIBUNE - What strong trend in the Fintech should mark the year 2019 in the era of the DSP2?
JULIEN MALDONATO - For the past 6 or 7 years, it has been very difficult for new players in personal finance to find a place for end-users. In terms of adoption, these players earn 1% market share each year. This is even more difficult in France than in other countries where consumers are less loyal to traditional institutions, such as the United Kingdom for example. This will help to strengthen the positioning of FinTech as suppliers of technologies and new infrastructures, and thus push them to move more towards a B2B offer rather than the general public.
This movement is reinforced by the DSP2 [la deuxième Directive européenne des services de paiements entrée en vigueur en janvier 2018, ndlr] because it forces large institutions to modernize and open the heart of their computer system. However, this race for modernization can only be won by relying on technological bricks provided by young and agile companies. We should see more partnerships, both in a logic of internal operational efficiency around technological solutions and customer experience to offer new services and products.
The new European regulation forces banks to switch to open banking, that is, to open their information systems to payment initiators and account aggregators. What types of new services should emerge from this approach?
In recent years, there have been improvements and comfort in mobile use, but there has not been a real service revolution. This could change with the arrival of "open banking", banks being forced to provide connectors (API) by September 2019 [date à laquelle les normes techniques de réglementation relatives aux interfaces de programmation entreront en vigueur, ndlr]. This open banking approach will push institutions towards extra-financial services. This is called the "beyond banking" ["au-delà de la banque" en anglais]. In this logic, it is not a question of helping the individual only when he needs a financial service but to position himself upstream and downstream of this need.
Take the example of real estate credit: the bank could then advise the client to remain tenant or not, help him in the search for real estate, the move and the development of the future property. It's about being the orchestra leader of the moment of life around the habitat. It's a bottom-line trend that will develop more easily with open banking like the Chinese platforms that are very much ahead of this point. There are real new uses in the boxes that will emerge in the coming months thanks to API connectivity [interfaces de programmation souvent présentées comme des briques de Lego, ndlr] and better control of the data.
There is for example the French company Valoo who looks at everyday objects. It allows today to make an inventory and ensure them. By coupling this service with means of payment, it could soon offer a service of guarantee of recovery. Any object bought, eligible and registered on the platform would benefit from a guaranteed recovery at a known% of the purchase price and for a period of 1 to 2 years. The user could then at any time during this period get his object back, resell it on Valoo or give it via a partner of the platform.
What new uses will develop thanks to the instant payment, these bank transfers made in less than 10 seconds?
We would like to have the answer in 2019! One could imagine use cases where the instant payment replaces the bank card for the purchase of a kitchen, for example. Imagine that the expenses with my credit card are capped, I will be able to present a QR Code to flash which returns towards my RIB in order to buy more quickly a property of a significant value (up to 15.000 euros). In the process, I could be offered an instant insurance product. We now have the necessary technical capacity for these uses. It is now necessary to find the good practices and to have them adopted by the mass to move towards an instant finance.
Instant finance, Asian actors already master very well ...
Yes. Beyond instant payment, the banking service proposition becomes instantaneous and included in customers' everyday experience (mobility, leisure, housing ...). These services are for example already offered by WeChat and Alipay: they integrate instant financing because they have the capacity, thanks to the immense masses of behavioral data that they brew, to propose this or that offer of credit. This allows you to switch to an instant and integrated finance at the moment of life. We are talking about invisible finance.
In France, Uber made the payment invisible. In Asia, Uber is downright "absorbed" by the WeChat platform. When two people exchange on the messenger and that one is part of its willingness to go somewhere, a trip in Uber is directly proposed. Everything is integrated within a platform. This is the model that will become dominant. In Europe, there are many refractory but I do not see how we can not be seduced by the sirens of hyper-personalization.
In 2018, financial startups attracted many investors. 365 million euros have been invested in France alone. Will this trend continue in 2019?
There is no reason for it to stop unless there is a global economic crisis. However, the funds will direct their investments towards different directions, in particular to B2B players, suppliers of technical solutions. Investors will also reinvest in Fintech who have already raised a lot of money, pending possible IPOs that remain binding on governance [mais dont certaines pourraient avoir lieu en 2019. Stripe, Credit Karma et Robinhood seraient dans les starting-blocks, ndlr]. In 10 or 15 years, probably only three or four very big Fintech players will survive. Investors will seek to raise the capital of these future champions.
Are we going to witness more M & A transactions in the coming months?
After 7 or 8 years of existence, the Fintech will enter the phase of maturity with consolidation movements. 2019 will probably mark this transition from a slightly euphoric phase to a phase 2 where we try to keep only platforms with large volumes. In the long run, only those who have millions or tens of millions of customers will survive. It is also valid for the traditional actors of finance. It is not excluded that in 10 or 20 years, the number of large banks will decrease. These actors "too-big-to-fail"could be focused on preserving mega-technology platforms that will come into finance.