Avertim is now cooperating withTechFluence – an award-winning research and corporate development firm focusing on European fintechs. Avertim and TechFluence will seek to create synergies and make fintech innovation effectively happen for large financial institutions.

Product and service innovations using modern technologies within the financial service industry (read “fintechs”) are not new, yet have gotten a broader attention only since about 5 years with traditional players in the Banking & Financial Services making their announcements, ramping up their investments and getting closer to startups that leverage emerging technologies and promise a great revolution.

InvesTech, PropTech, InsurTech, FinTech, RegTech, what else?

There are various examples where fintechs can create new value, optimize processes or improve customer experience:

         Digital-only banking solutions are simple, convenient and provide enhanced customer experience, especially thanks to embedded customer data-driven approaches and geo-related insights. It helps providers to focus on what customers need best. Leading digital-only banks include Ally, Fidor Bank, Monzo, Chime, HelloBank, N26, Simple. It is also worth noticing that ING-Diba holds no physical branch in Germany however reported a net profit climbing to €877 million in 2017.

         P2P lending is a new method of debt financing that allows people to borrow and lend money without a financial institution. The market was valued at €22,2 billion in 2015 and is projected to reach €394 billion by 2022, growing at a compound annual growth rate of 51.5% from 2016 to 2022. Leading companies in this space include Lending Club, Upstart, Prosper, Funding Circle, Zopa, Lendix, Fixura, Auxmoney, Bondora, RateSetter. SME lending is also a great example showing how technology and digital tools can offer better solutions for market that has been considered for long as underserved by traditional banks. Startups like Kabbage or Lendio have made its their core business.

          Robo-advisors are automated platforms and algorithms that provide financial and investment advice with minimum human intervention (Betterment, Wealthfront, Nutmeg, Moneyfarm, Yomoni, Gambit, etc.). In 2018 there are more than 100 robo-advisor and they recently crossed €171 billion in assets. Most established banks and asset managers have invested in this space either by acquiring startups or launching their own product.

           Blockchain technologies offer ways to rethink how any data and information is created, shared and stored in a decentralized, secure and transparent way. There are multiple applications in trade finance, trading, money and investment services, equity financing, consumer banking, etc. It is estimated that blockchain could help reduce bank indrastructure costs by 30%. Financial service companies are forming consortium to develop their own private blockchain (R3 Corda, Hyperledger, Ripple).

          Crypto-currencies are the first and still the most used blockchain applications. What started in 2009 as a peer-to-peer electronic cash system with Bitcoin is now a mature ecosystem of 1600+ worldwide cryptocurrencies that can be bought, exchanged, used as payment or reserve of value by anyone. The crypo-exchange platform Coinbase has a €1,3 billion valuation and raised altogether €186 million in funding. The bitcoin alternative Ripple is capable of performing 50 000 transactions per second (twice as much as VISA) and offers a good use case for banks to easily move large amounts of money cross-border in a fast and cheap way. Ripple’s market capitalization went about €124 billion in the beginning of 2018.

               Digital payments are changing the way we pay online (PayPal, Apple Pay, Amazon Pay, Stripe), transfer money to friends (PayPal, Venmo, Google Wallet, Popmoney, Square Cash, Dwolla), perform international money transfers (TransferWise, WordRemit, Revolut, Azimo, FlyWire). Mobile payment revenue is expected to surpass €0,86 trillion by 2019. In Asia the adoption is even wider with WeChat Pay reporting 600 million active monthly users and Alipay (Alibaba) 450 million ones.

                 Chatbots & Artificial Intelligence are among most promising fintech trends, some recent reports suggesting 30% of large financial institutions are investing in these technologies. It can take the form of big data analytics, natural language processing, machine learning and virtual conversational assistant (chatbot) which are often used in personal finance to give customers real-time insights as well as tailored financial recommendations for budgeting and smart saving (Penny, Finie, Cleo, Digit, Plum)

                   RegTech is catching more and more attention as regulatory constraints grow (identity verification, KYC, Anti-Money Laundering, risk management, market surveillance, fraud detection, PSD2, data privacy & GDPR, etc.). Regtechs can also provide solutions for financial reporting, tax management, cybersecurity or quantitative analytics.

                  Related areas of fintech innovations include “proptechs” (new products and services disrupting the real estate industry), insurtech (disrupting the insurance sector) and you can go on (lawtech, wealthtech, pensiontech, investtech, everythingtech?).

Where innovation comes from

Fintech innovations largely come from startups, ICT and tech companies or financial infrastructure providers. Traditional financial institutions try to keep up the pace and invest in out-of-the-box fintech solutions mainly through collaborations, support programs, investments, M&A or in-house innovations. They have launched dedicated organizational structures such as:

A Fintech revolution?

Although fintechs are here to stay, it is hard to talk about a revolution yet. The investments into FinTech startups raised up to €3,9 billion in 2017 in Europe only (business angels & corporate VCs), but established banks and service providers are still in place. It takes a long journey for an effective disruption to happen, especially in the banking sector. The fintech “noise” everyone has heard has yet to let place to effective executions that scale.

Challenges for effective action

The road to effective fintech innovation within large financial institutions is paved with challenges: designing business models often far from the as-is; getting the management buy-in and aligning with different departments within the organization (often also requires a culture change); keeping up with the rapid evolution of customer behaviors, cooperating with startups that have a different pace, management and culture; integrating new technologies into already complex processes; training staff accordingly and hiring the right digital talents; complying in uncertain and challenging regulatory environments, to name a few.

Get in touch with us to discuss how we can help solve these challenges and define integrated, pragmatic and well-adapted solutions to execute your innovation projects.


Avertim is a specialized consulting firm founded 2007 operating in Brussels, Amsterdam, Frankfurt, Paris and Lyon and focusing on the enhanced alignment between Strategy and Operations. Working together with leading European Banks and Financial Institutions, we help our clients unlock value and bring their ideas and projects to life through a profound understanding of strategic business benefits, and then accelerate their performance with a pragmatic 'doing' mindset and approach.

TechFluence is an award-winning research and corporate development boutique at the intersection of Startups, Financial Services and Venture Capital, recognised by the Wall Street Journal / Financial News FinTech40 "40 Innovators Shaping the Future of Finance" (2014) and the Innovationspreis IT Bestenliste (2015). In 2013 Techfluence co-founded FinTech Forum, the first and largest hub for FinTech in Continental Europe with a community of over 12000: 16 events; 260+ startups, $310+ mn in funding and $300+ mn worth of exits as of end-2017.