Weekly Briefing No. 165 | A Fintech-Flavored SXSW Recap


Welcome to The FR, where the party never ends.

In this edition:

  • A Fintech-Themed SXSW Recap

  • A Mere Slap on the Wrist for Investment Advisors

  • The Evolution of Biometrics

  • Skimmburglers Persist

  • AI and Healthtech


A Fintech Review of SXSW

Your Financial Revolutionist was at the SXSW (or “South By” to those in the know) festival last week, and as always, it was an experience. The event is one of the biggest in the world, with some 70,000 people descending on Austin, Texas for the week-long business and cultural shindig.

But if you’re in the fintech industry, it can be a bit overwhelming. The vast majority of those 70,000-odd people attending are not related to anything financial technology-oriented. The key is finding that small percentage attending who are from the fintech world — typically a Who’s Who of emerging and well-established companies, as well as leading investors. So how do you know what panels to attend, what parties to go to, and which people to seek out? It can be like finding a needle in a haystack. Luckily, we’re here to give you the lowdown from South By as it pertains to fintech.

Unsurprisingly, much of the fintech-related discussion centered on the usual hot topics of the day, such as AI, blockchain, diversity, and the underserved. On the financial inclusion front, the ability for technology to democratize financial access was a big point of discussion; one panel featuring fintech luminaries such as Ladder CEO Jamie Hale discussed how technology has increased access to financial services, particularly for communities that have been historically left behind. EarnUp was another company we had our eye on for bringing financial inclusion to low-income consumers. And apropos for International Women’s Day falling during the event, we heard from several panels on the benefits of inclusion and increasing female representation in the business world.

Authenticating and securing identity in the digital age was also a big topic (and one we’ve covered in the past), and we were glad to see several interesting firms operating in this area, including Civic Technologies, which seeks to create a blockchain-based global digital identity platform. We especially approve of their blockchain-powered beer vending machine.

 A Slap on the Wrist for Investment Advisors  

This week, LPL Financial, Wells Fargo, Deutsche Bank, and several other firms agreed to a “measly” $125-million settlement with the SEC. In essence, financial advisors of these firms and others failed to adequately disclose when a variety of mutual fund share classes were available, some of which were devoid of 12b-1 fees. We have long believed that beyond technological capabilities, the mother’s milk nourishing many fintechs is trust. This latest example speaks volumes to the idea that for all the corporate-level talk over how incumbent advisor firms want to do right by clients, the rank and file at some of them are not fully on board.

Digital financial advisors still have growing up to do, but their superior social contract with customers leads us to believe that many investors will tolerate growing pains if it means not having to worry about being tricked into buying higher-priced investment products. The additional good news for digital advisors: $125 million is chump change for the offending firms. So while they will, of course, commit to following a more righteous path in the future, it remains to be seen if they’ve truly turned over a new leaf.


The Evolution of Biometrics?

Biometric-based authentication has continued to make headway in financial services since the first banks started to allow fingerprint touch ID  to log into mobile banking several years ago. Since then, financial firms have gone further down the biometrics path, with features such as voice recognition when calling in to contact centers and even iris-scanning.

The latest in this ongoing trend comes from U.K. bank NatWest, which is piloting a program with 200 select customers that will enable them to use their fingerprints to verify payments of more than £30. For such purchases, instead of entering a PIN, these customers will instead place their fingers on their debit cards, which will be outfitted with technology designed to read fingerprints.

Another company, Neuro-ID, uses unique signals based on biometric monitoring to reveal a loan applicant's real-time "digital body language." The company uses proprietary technology to monitor metrics such as click hesitation, extra movement, idle response time, etc., to analyze how people respond to important questions.

Biometrics technology has much promise — it certainly is more secure than the old username-and-password method of authenticating — but still has a ways to go before seeing widespread consumer use. Though it seems we’re on the way there.


Skimmburglers Persist

No, we’re not referring to fashionable readers of TheSkimm who steal things. Instead, we’re talking about ATM skimmers, who will likely continue to find new and innovative ways to skim ATM PIN codes as long as cash is still accepted. In the piece below, the trendy Brian Krebs (and by trendy we mean cybersecurity expert who understands the latest developments in cybercrime) lays out how a young woman in Hurst, Texas took advantage of the fact that few people who use drive-up ATMs cover the PIN pad when withdrawing money.

Can AI Make Doctors More Humane?

It’s an interesting question posited in a new book by cardiologist, author, and tech enthusiast Eric Topol called Deep Medicine: How Artificial Intelligence Can Make Healthcare Human Again.

In an interview with CNBC, Topol says AI technology can help do rote, mundane tasks — such as filling out paperwork — thus freeing up doctors to spend more time with patients. He also discusses things like how AI can help in building individualized diets for patients.

HealthTech is certainly one of the more buzzworthy and up-and-coming subsectors of the technology industry. It will be interesting to see how — and to what extent — AI does get deployed in healthcare.

Quote of the Week

“No matter how young you are, you’re too old for SXSW.”

~ Kara Swisher