Episode 9: What does a Fintech journalist think about the financial industry? | Julie Muhn

Julie Moon, a research analyst at Finnovate, offers an in-depth exploration of the fintech industry and highlights what makes Finnovate’s conferences unique. Finnovate stands out with its demo-only format, where fintech companies are given seven minutes on stage to showcase their technologies live. This approach excludes PowerPoint or pre-recorded content, ensuring that presentations are hands-on and interactive. This forma tallows attendees to experience the technology firsthand and provides a platform for direct engagement with the innovators behind the solutions.

Julie elaborates on fintech, a blend of finance and technology, which encompasses familiar concepts such as credit cards, digital onboarding, and peer-to-peer payment systems. She notes that while these technologies may seem standard now, they were groundbreaking when they first emerged. For example, the shift from traditional banking apps to mobile apps was a significant advancement, allowing users to perform banking tasks on their phones. Today, the fintech landscape continues to evolve with advancements in AI, blockchain, and other emerging technologies.

One significant challenge faced by many banks is the use of outdated systems like COBOL, which has been in use since 1959. Julie explains that these legacy systems complicate the integration of new technologies and can be vulnerable to cyberattacks. Additionally, the dwindling number of COBOL programmers makes maintaining and upgrading these systems increasingly difficult. The slow pace of change within banks is also attributed to regulatory pressures and the need to protect consumer data, which can make the adoption of new technologies a cautious and deliberate process.

Julie provides clarity on blockchain and cryptocurrency, explaining that blockchain acts as a decentralized ledger, or digital notebook, that records all transactions transparently and securely. Each transaction is added to a chain of previous records, making it challenging to alter past entries. Cryptocurrencies like Bitcoin, which operate on blockchain technology, represent digital money that exists outside traditional banking systems and is not backed by physical currency or controlled by banks.

She also discusses decentralized finance (DeFi), which leverages blockchain technology to offer financial services without the need for traditional banks. DeFi enables activities like borrowing, lending, and trading to occur directly between users, often with lower fees than traditional banking transactions. This system uses smart contracts—self-executing contracts with the terms directly written into code—to automate transactions and reduce the need for intermediaries.

Looking to the future, Julie highlights key trends in fintech, including open banking and banking-as-a-service. Open banking aims to make the financial ecosystem more connected and accessible by allowing users to securely share their financial data across platforms. This integration simplifies the management of various financial accounts and provides a more streamlined user experience. Conversely, banking-as-a-service enables non-financial companies to integrate banking services into their own apps, expanding access to financial products and services beyond traditional banking institutions.

Finally, Julie emphasizes the critical role of networking in the fintech industry. Conferences like Finnovate are essential for building valuable connections and fostering partnerships. The opportunity to meet industry professionals face-to-face and engage in meaningful conversations can lead to new collaborations and insights that are vital for growth and innovation in the fintech space.