LAS VEGAS–One the final day of the meeting, attendees at the Money 2020 Conference here were told there is a “big shift” taking place in the B2B space, given an update on what the “creator economy” is seeking, heard from one regulator on how it sees its role, and were told that payments can be a great tool for improving inclusion.
Here's a look at some of what was discussed:
Fintechs & Investments
The economy of the last few years has led to ample capital being thrown at many fintechs. But that’s changing, and it’s a good thing, said one person.
“When people are throwing money at you, you end up getting really sloppy in the way that you operate,” said Steve McLaughlin, founder, CEO & managing Partner of FT Partners. “I think what this market will do for people is drive you to make really brutal decisions where the focus really matters, so that you can look forward and get through this environment.”
Added Jackie Reses, chair & CEO of Lead Bank, “It's really hard to attract, even in this market where companies are laying people off,” she said. “So, understanding, culturally, how to build those foundations, for growing a business is incredibly important.”
McLaughlin said he is “very bullish” on the next 20 years.
“Rough patches have always been followed by massive opportunity,” he said. “And I’m seeing a big shift to B2B, whether it's fraud solutions or enterprise payments [for example], people are moving to [focus on] the back office B2B space.”
The Creator Economy
During a discussion on the Creator Economy and financial education, Brianne Kimmel, founder & Managing Director of Worklife, told the meeting, “Historically when we think of young people making money, it's usually working an hourly job at a mall or a restaurant. Now we're seeing new classes of work that can be done on the internet: A Twitch streamer or videos on Tik Tok who can earn six figures before they leave the house.
“This next generation is, I believe, going to up-level all of us because they're learning to make large sums of money sooner than we would have when we were in high school,” Kimmel continued.
Worklife bills itself as the first creator-friendly venture capital firm and is opening a new studio in Brooklyn, following the opening of one in Silverlake. “We were the first VC firm to have 5,000 people wait outside to get into our space and we want to keep doing these creator focused events,” she said. “We recognize that there's a lot of people online that have distribution, but the thing that's currently missing is a space for them to meet their fans IRL.”
Kimmell was joined by C.J. MacDonald, founder & CEO of Step, a company that aims to strengthen financial literacy at an early age. McDonald launched Step approximately four and a half years ago and has had some big-name investors, including Will Smith and Justin Timberlake, but even he has had to pivot recently, he said. Many companies may have difficulty raising money over the next 12 to 18 months, McDonald said, but there is still opportunity for fundamentally sound businesses.
“You really have to understand your business, where you're at and make sure that you are thoughtful and responsible with your future plans,” he said.
Step recently announced that in 2022 it has raised $300 million.
The Role of Financial Regulators
Financial regulation can also play a fundamental role, to help foresee issues that come with uncertain times, according to Adrienne Harris, Superintendent of Financial Services at the New York State Department of Financial Services.
“We want companies to understand that as an agency we are more than enforcement, we are about the examination, supervision and rule writing to ensure we keep pace with the changing market,” Harris said. “The best advice for anyone in the space is never surprise your regulator, whether you are a new fintech or incumbent bank. Always engage early and often with any regulator. It will be beneficial for all and will help to build a long-lasting relationship.”
Over the past 12 months, through the NYDFS’s financial restoration program, the agency has given $118 million back to New Yorkers, an increase of 81% compared to 2021, according to Harris.
Payments & Inclusion
Attendees at the Money 2020 Conference were also told alternative payments at traditional financial institutions are key to increasing the inclusion of the underbanked in emerging markets.
According to Cecilia Tamez, chief strategy officer of Dandelion said that can often be easier by partnering with fintech startups or independent companies. “Interoperability is key to penetrating these growing markets. Financial institutions don’t need to do it alone – finding the right partner can help with the transformation,” Cecilia Tamez. “Banks no longer have to take 35 years trying to build something in-house when technology already exists.”
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