The annual LendIt Fintech conference goes digital, but still attracts A-list presenters
Associate Director of Insights, Payments, Mark Miller shares his highlights from this year’s all-virtual LendIt Fintech conference.
Like most things in 2020, LendIt Fintech’s annual conference, held from September 29th to October 1st, was an all-digital event. Gone were the glitzy stages, interactive booths, and multimedia presentations, replaced with Zoom-like conversations and a greater emphasis on the “fireside chat.” The conference organizers incorporated live-chat and Q&A, along with countless virtual networking opportunities, which collectively kept things fresh and engaging.
Further, the move to digital did not preclude the participation of key players in the banking and fintech space. Among the keynote presenters were Stephanie Cohen, the recently-announced new co-head of Goldman Sachs consumer banking and wealth management division, SoFi’s CEO Anthony Noto, FDIC Chairwoman Jelena McWilliams, and Zach Perret, CEO and co-founder of Plaid.
Right from the start in the opening remarks, and to the surprise of noone, it was clear that the fintech response to COVID-19 would dominate the three-day conference. While multiple tracks ran each day, covering topics like credit underwriting, financial health, regulation, and real estate, the three key themes across the board were the continued growth of digital banking, the importance of partnerships, and how fintechs stepped up to save jobs.
Growth of digital banking
The conference kicked off with LendIt Fintech Chairman Peter Renton commenting that the “growth of digital banking has been nothing short of amazing!” Certainly, with retail closures and stay-at-home orders in response to the growing pandemic threat, traditional and fintech banks had to quickly ramp up their digital capabilities. Fintechs, due to the digital nature of their products, had a leg up from the start.
In a conversation on “The Future of Banking”, Sonali Divilek of Marcus by Goldman Sachs revealed that mobile banking has surged by 50% since the beginning of 2020, and that Marcus was planning to launch both checking and investment options to complement its recent rollout of Marcus Insights. A similar panel including senior executives from MoneyLion, Varo Money, Wealthfront, and N26 focused on the need to meet the expectations of customers, and highlighted the contrast between traditional banks, who had to go digital overnight, and online banks who were built digital for Millennials and Gen Z. Dan Carroll, co-founder of Wealthfront, commented that fintech players need to be ruthless about automation, yet still present when customers need help.
A Wednesday morning keynote discussion with Anthony Noto, CEO of SoFi, elaborated on this, with his prediction that customers will continue to use digital banking after the pandemic. He spoke of the shift in consumer preference from revolving to fixed debt, and how many are taking advantage of the current low rates through consolidation and refinancing. Most of SoFi Money’s customers, he revealed, are coming from legacy banks (with half having more than one account). SoFi Invest, on the other hand, is mostly targeting and acquiring customers new to investments.
In an aptly titled day-three session, “Fintech was Born for this Moment,” Zack Perret, co-founder and CEO of Plaid, promoted the value and ubiquity of fintech partnerships, essentially arguing that every business is either a fintech or relies on a fintech to do something. He stressed that we should not view the landscape as a battle between fintechs and banks, but rather as opportunities to partner, for there is “a lot more partnership than there is competition.”
Another third-party provider whose services can benefit both fintechs and traditional banks is Experian. In “The Next Level of Fintech: Building your Customer Ecosystem,” Craig Boundy, CEO of Experian North America, spoke of larger lenders tightening credit standards and “optimizing friction,” in many cases to combat fraud. Fintechs can help with this, particularly through automation, which has been accelerated by COVID-19. Experian’s tools, as well, can help lenders maximize the customer experience while still safeguarding assets.
In one the conference’s best examples of a partnership between a financial giant and a fintech, Sherri Haymond, EVP of Digital Partnerships at Mastercard, and Jason Wilk, CEO and co-founder of Dave, discussed their partnership, particularly in relation to improving financial health. Mastercard’s ability to gather in-depth insights around customer shopping behaviors and needs helps Dave enhance its value proposition, and offers more relevant benefits and perks. Wilk also revealed that Dave’s next product would likely be in savings, with a tool that will help people know how much they can safely save.
Fintechs saving jobs
An overarching theme of the conference was fintechs stepping up to face the new, complex challenges ushered in by the COVID-19 pandemic. And one of the key areas where they shined was through participation in the government’s Paycheck Protection Program, or PPP.
The highlight of this came early on day one, when Kabbage co-founders Rob Frohwein and Kathryn Petralia took the virtual stage in a session, with a title that tells the whole story – “300,000 Loans in Four Months: How Kabbage Bet the Company on PPP and Saved One Million Small Business Jobs.” The focus of their loans, the pair explained, was small business owners, with a median loan size of $13,000, and one-third going to businesses in zip codes with an average household income under $50,000. To put their accomplishment into perspective, they pointed out that the only larger PPP lender was Bank of America, which has about 800 times more employees than Kabbage! It was truly a story of a fintech player stepping up to the plate and delivering big, processing 800,000 applications and lending $7 billion.
What we think
While travelling to a conference, seeing the speakers up close and personal, and connecting with old contacts while making new ones is ideal, the circumstances of 2020 make that impossible. Lendit Fintech, in a switch to an all-digital format, was still able to put on an engaging show, while highlighting the expanded role that fintechs have taken on, with a glimpse of what is to continue in the future. I look forward to attending in 2021, hopefully in the (physical) front row!