Deciphered is a fintech podcast brought to you by Bain & Company. Each episode brings insight and analysis on specific industry topics, dissected with data with help from fantastic guests. We're deciphering the financial services world in a way that is digestible, to help add context to your day to day industry conversations.
What are the Top Trends for Fintech in 2023?
45:13In this episode of Deciphered, Adam Davis, Associate Partner at Bain & Company, and Jeff Tijssen, Expert Partner and Global Head of Fintech at Bain & Company are joined by Bain & Company partners Karim Ahmad, Michael Smith and Mike Cashman to discuss what they think the hottest trends in Fintech will be in 2023. After a turbulent 2022, what are some of the areas that will drive growth?Timestamps:- 3:57: Top 3 Fintech trends for 2023 - 11:00: Things that won't change in the fintech sector - 13:10: Consolidation & acquisitions: Differences between the UK vs US - 15:44: Will VCs continue to see B2B as more shielded from volatility than B2C going into next year? - 18:30: What's investable right now? - 22:22: The pace of change in the financial services industry - 23:29: Hotly-anticipated payments infrastructure projects that will be implemented in 2023 - 27:08: Real-time payments in the US & what's happening there vs Europe - 32:15: How will the crypto space evolve in the future? - 34:52: What's changed in the world of M&A in fintech - 38:06: What are some of the trends in 2022, and how adaptable will they be in 2023? - 42:08: What will Apple do for consumer financial services? Please subscribe to the show so you never miss an episode, and leave us a review if you enjoy the show!You can find Adam Davis hereYou can find Jeff Tijssen hereYou can find Karim Ahmad hereYou can find Mike Cashman hereYou can find Michael Smith here
Fight or Flight: What’s in Store for Fintechs in a Changing Rate Environment?
32:18In this special episode of Deciphered, live from Money 20/20 Vegas, Adam Davis, Associate Partner at Bain & Company, and Jeff Tijssen, Expert Partner and Global Head of Fintech at Bain & Company are joined by Laura Spiekerman, Co-Founder of Alloy, and Simon Taylor, Head of Strategy & Content at Sardine, to delve into the effects that macroeconomic trends such as rising inflation and CPI have on fintechs and neobanks, as well as highlight some of the innovations and products that our guests are liking in spite of, or because of, the macroeconomic climate.Timestamps:04:40: Fight or flight what's in store for Fintech in a changing rate environment? 09:07: Incumbent revenues - are they sustainable? 12:43: Neobank revenues being impacted by interest rates 15:15: What percentage of challenger banks will be acquired or fail in the next 12 months?22:40: Internal bank teams procuring Fintech services 26:39: What is exciting considering the macro environment? Please subscribe to the show so you never miss an episode, and leave us a review if you enjoy the show!You can find Adam Davis hereYou can find Jeff Tijssen hereYou can find Laura Spiekerman hereYou can find Simon Taylor here
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Institutional Blockchain Adoption: What is the Current State and Where is it Heading?
52:59In this episode, we explore how the latest cycle in the cryptocurrency market has impacted institutional adoption of the underlying technology; blockchain. Enterprise adoption of the technology is still prevalent. In Finance we are seeing blockchain technology adapted for multiple use cases, for instance, International Payments, to address some specific niches in Capital Markets, in Trade Finance, looking to solve Digital Ownership, looking to disrupt Loyalty and the tokenization of private assets.Within Financial Services, the ‘purists’ have been building underneath the hype.We will look at where the institutional adoption of blockchain is at right now, what are some of the most applicable use cases, and where we might see it go in the future.Timestamps:- 06:23: Institutional blockchain adoption - What is the current state, and where are we heading?- 10:24: What are the appeals and use cases of organisations using blockchain technology?- 18:12: What are the different types of blockchains, and where will adoption head in the future of the financial services industry. - 24:16: Risk focuses and adopting new use cases on chain. - 36:00: Risk controls when using blockchain infrastructure. - 41:23: Will Web2 companies continue to invest in this space?- 45:48: Where will blockchain technology develop, and be adopted, looking 10 years into the future from now?- 49:02: Will the adoption of blockchain technology by other industries outside of FS lead to widespread adoption? Please subscribe to the show so you never miss an episode, and leave us a review if you enjoy the show!You can find Adam Davis hereYou can find Thomas Olsen hereYou can find Morgan McKenny hereYou can find Todd McDonald hereSources cited:
Neobanking Revenue: How to Differentiate in a Crowded Market
38:07In this episode, we explore what the future holds for neobanks, with so few currently profitable in the face of a current economic downturn. We’ll discuss the challenges of setting business strategies over the next couple of years, answering key questions such as whether neobanks should pursue growth at the expense of unit economics, how they can continue to differentiate their revenue streams from one another, and ultimately what they should do as rising rates pressure investors to stay clear of potentially “riskier” assets.Neobanking Revenue: How to Differentiate in a Crowded MarketTimestamps:- Neobanking revenue: How do you differentiate in a crowded market? (3:21)- Where are we right now with Neobanks? And how healthy are they? (6:08)- VC funding: How will this play out with regards to Neobanks vs Fintech in general (10:17)- Examples of Neobanks diversifying revenue & BaaS (17:15)- Subscription based revenue: Does it work globally? And how will it impact the revenue of Neobanks? (21:50)- Does becoming a licensed bank slow down the creation and shipping of products? (23:42)- Embedded vs standalone banking in the future (28:55)- How should we bank with a Neobank? (33:53)Please subscribe to the show so you never miss an episode, and leave us a review if you enjoy the show!You can find Adam Davis hereYou can find Jeff Tijssen hereYou can find Nik Milanović hereYou can find Valentina Kristensen hereSources cited: Nubank Customer Base - StatistaRevolut Customer Base - RevolutNeobank Profitability - ForbesGoldman Consumer Banking Revenue - Pyments.com
Embedded Finance: What Does it Take to Prosper in the New Value Chain?
50:45In this episode of Deciphered, Adam Davis, Associate Partner at Bain & Company and Jeff Tijssen, Global Head of Fintech, Bain & Company, are joined by Matt Harris, Partner, Bain Capital, and Sophie Guibaud, Co-founder & CCO of Fiat Republic, to discuss embedded finance marking a new era in how consumers and businesses build and manage relationships with financial services. Embedded Finance: What Does it Take to Prosper in the New Value Chain?Timestamps:- Defining embedded finance (11:10)- Sticky & data rich relationships (12:42)- A new value chain & how organisations are positioning themselves within it (13:16)- Who wins from a revenue perspective, and how will that shift in the next 2-5 years? (16:42)- New use cases of embedded finance (26:20)- What capabilities are needed to operate in this value chain? (29:29)- Are we seeing other platforms bringing financial services in-house? Or is this limited to bigger companies? (34:31)- Risk within the value chain, and embedded finance model (38:24)- Stepped approach to embedded finance (40:10)- Regulations in an embedded finance context (41:39)- Most important points to consider about risk and compliance (45:54)- Implications of complete embedded financial services (48:05)Sources & Resources cited:- Sophie's Book Co-Authored by Scarlett Seiber: Embedded Finance: When Payments Become An ExperiencePlease subscribe to the show so you never miss an episode, and leave us a review if you enjoy the show!- You can find Adam Davis here- You can find Jeff Tijssen here- You can find Matt Harris here- You can find Sophie Guibaud here
Volatility and Market Correction: Where Are Fintech Valuations Heading?
36:41In the second episode of Deciphered, Adam Davis, Associate Partner at Bain & Company and Mike Cashman, Partner, Bain & Company are joined by Sarah Kocianski, Strategic Insights Lead for Fintech at Founders Factory, and Tim Levene, Partner and CEO, Augmentum to discuss the future of Fintech valuations. Where do the market correction and current volatility leave Fintechs?Timestamps:- Volatility & market correction, where are fintech valuations heading? (3:08) - Fintech funding (5:37) - Macroeconomic pressures vs dry powder in the current market (6:36) - Are lower risk assets back in favour? (8:01) - What investors and founders are looking for (10:40) - Fintech valuations (11:53) - Are Fintechs overvalued on hype and hope vs fundamentals? (13:21) - Will companies stay private for longer? (18:10) - Superior geographies, in terms of investment and valuation perspectives? (19:39) - What type of fintech do you want to be in this market? (24:52) - BNPL (25:03) - Advantages of rising rate environments vs consumer/business defaults (26:41) - Investing in sectors and trends, from services or product perspectives (27:40) - PE, VC, and growth equity splits (29:35) - Sentiments around raising investment (34:30)Sources & Resources cited:-CB Insights: State of Fintech Q1'22 Report-BBC UK: What is the UK's inflation rate and why is the cost of living going up?-Axios: Fintech Deals Newsletter, Fintech SPACs go splat-Dealroom: Fintech 2021 Report-SoFi: Q1 2022 Results Report-Bain & Company: Macro Trends
Divergence or Convergence: What Is the Short Term Future of the BNPL Industry?
43:38In this episode, Adam, Ryan, Nigel and Alex look at how Buy Now Pay Later (BNPL) has evolved, where it is in the present day and where it is heading. -What percentage of transactions currently use BNPL? -When will the rate of growth for BNPL slow? -How do retailers and providers evolve to meet consumer needs? -How will regulators impact this new financial phenomenon?Timestamps below:- Divergence & convergence? The Bain answer first! (2:36) - Macroeconomic pressures (5:32) - The background of BNPL (6:16) - Credit modules (8:36) - What has led to the rise of BNPL? (10:20)- Effects of consumer experience on change (10:36) - Data analytics team overview (16:02) - Incorporating human psychology into algorithms (19:58) - Merchant benefits (23:06) & (24:07) - BNPLs are becoming platforms (23:47) - Where does BNPL fit in with retailer's payment strategies (27:00) - Where does your biggest cost space sit (29:26) - Generational shifts & future projections for growth (32:22) - Who should be getting into BNPL? (33:53)- Regulators (42:33) Please subscribe to the show so you never miss an episode, and leave us a review if you enjoyed the first-ever episode of Deciphered. - You can find Adam Davis here- You can find Ryan Garner here- You can find Nigel Verdon here- You can find Alex Lang here