Shortly, my colleagues Aurélie L’Hostis, Kerstin Wehmeyer, and I will be setting off for the annual money festival, Money20/20 Europe. The theme this year is, somewhat unsurprisingly, “Human X Machine.” The event prophesizes the ascent of a new world where humans work side by side with increasingly intelligent machines. And the most fascinating of them all at the moment is, of course, AI. While you might think that we’ve reached peak AI (and perhaps we have in terms of event content!), this is just the beginning, so a very big chunk of the conference is about this, but it’s still just one of the themes that we’re hoping to discuss with the fellow attendees.
Can We Monetize GenAI In Financial Services — And If So, When?
AI is not new in financial services, and certainly not in payments, where we’ve used it for payments authorization, decisioning, and fraud detection. But generative AI (genAI), and the adoption of the EU AI Act, have changed the game. While at Forrester we’ve explored some of the use cases of genAI in banking, payments, and insurance, there’s plenty more of experimentation and innovation. We’re looking forward to discussing operationalizing genAI — the do’s and don’ts from a legal and ethical perspective, securing budget and generating ROI, and preparing the groundwork by investing in appropriate data and risk foundations. Governance does not a titillating keynote make, but if we’re going to scale genAI deployments, doing this in a trustworthy way is key.
What Is “The Universe Of One” — And Is It Worth It?
Personalization is hot, though not everyone is really clear on what it is, how to make it work, and whether it’s worth the investment. “A Customer Universe of One” is one of the key themes for this year’s Money20/20 Europe, although the program seems a bit thin on detail. At Forrester, we’ve long argued that enterprises think of personalization too narrowly, mostly as a marketing technique, and too early in the customer lifecycle — at the discovery stage, when most consumers see it as intrusive and not all that valuable.
From a customer perspective, the value is there much later in their relationship with the brand, when (or rather if) there’s trust and a deeper understanding of the customer’s needs. And in financial services, surely the value is there when personalization is deployed in the service of customers’ financial well-being. There’s much to explore here, particularly in the nitty-gritty of what those experiences should look like: how we can make them effortless with automation, trustworthy with the right user experience, and engaging with immersive experiences — and of course, on the side of the enterprises, how we can leverage existing martech and banking architectures to make this cost-effective and scalable.
Have Open Banking, Embedded Finance, And Sustainability Lost Their Shine?
Open banking is getting very little space at Money20/20 this year (some call it the revolution that never happened!). We’ve always said that expectations around open banking were not realistic and that something as complex as this would need time to overcome the initial hurdles of use case selection, monetization strategy, and customer trust. But rather than focusing on the aforementioned financial well-being use case, we’ve moved to exploring pay-by-bank and even the pensions dashboard.
It’s similar with embedded finance. Embedded finance was always going to be a use case of open finance through the integration of financial services into nonfinancial customer experiences, journeys, or platforms. At Money20/20 this year, we’ll be getting a lot of depth on the travel journey and embedding finance into that (e.g., through dynamic currency conversion and payment personalization in travel onboarding). But we’re still not that clear on the overall potential of embedded finance and how to assess it realistically to help executives decide what, if any, resources they should dedicate to it.
And last but not least, when it comes to sustainability, we’re really just scratching the surface. As allocators and stewards of capital and underwriters of risk, financial services firms have a large role to play in the transition to a more sustainable future. There’s so much innovation and a massive opportunity around developing better technology to generate and verify sustainability and climate data. But sadly, this is not a big theme at Money20/20 this year.
What have we not discussed? The themes that always appear at Money20/20: CBDCs, stablecoins, Web3, decentralized finance, and asset tokenization. These may underpin the future of money, but the complexities of regulation, ecosystem orchestration, and technology implementations mean that progress is slow. Indeed, while we’ve put Web3 on our 2024 list of top emerging technologies in banking, it remains a long way from delivering on its promises. Web3’s benefits are negligible today, and it’s unclear how they’ll develop.
We look forward to meeting you at Money20/20 Europe! Clients interested in discussing the top themes can chat with Aurélie or me via inquiry or guidance session.
