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Straight Talk Technology

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Fintech innovations have come a long way in the eight years since the first Finovate Europe conference was held in London, both in terms of the functional areas of financial technology they address and the business ambitions of their developers.

Back in 2011, the pitches in the event's then-novel seven-minute demonstrations generated a series of anguished tweets from the audience pleading for anything other than another personal financial management (PFM) tool. In the wake of the 2008 financial crisis, many of the developers themselves came from the "breaking banks" school of thought, offering an alternative to traditional banking.

Fast forward to this year's event and PFM tools were thin on the ground, and a wide range of function and service offerings were on display. More importantly, far from looking to replace banks, the majority of the 60+ pitches over the first two days of the event were explicitly intended to sell products and services to banks.

Although PFMs might have once been the visible face of fintech, API-enabled open banking is rapidly making them a standard feature of apps from both traditional banks such as HSBC and challengers such as Starling in the UK. This doesn't bode well for the future of the standalone companies offering screen-scraping services that grew up in the days before PSD2.

PFM of a different kind came to the fore, though, and a good example of the evolution of the fintech world is provided by German wealth management specialist Fincite, which has developed modular software that links bank customer data to an AI advice engine with portfolio management software (PMS).

Although the replacement of PFM by PMS might not seem that interesting, the fact that ABN AMRO joined the vendor to promote it to other banks is certainly a world away from the "fintech versus banks" mindset.

Ironically, it also marks a significant step toward the realization of one of the main ambitions of the early utopian end of the fintech spectrum – the democratization of finance. By deploying the latest technology and wealth management services that were only previously available to the high-net-worth end of the market, fintechs are enabling banks to greatly increase financial inclusion, while reducing their overall costs.

Instead of breaking banks, it looks like fintech will actually rebuild banks for the better.

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