The rise of fintech was of course a big theme at the recent Eurofinance conference in Vienna. Much of the discussion took place in a conference “Treasury Lab.” In a panel discussion, Janet Thomas and Philippe Gelis, CEOs of TouchFX and Kantox, respectively, debated the disruption their respective companies might bring to the FX space.
Kantox takes much of the guess work out of FX risk management and execution, primarily for small and medium-sized enterprises that do not enjoy the level of service provided by banks to larger corporates. Kantox provides a platform for FX spot and forward transactions and international payments that automate much of the process while providing price transparency SMEs typically don’t enjoy, according to Mr. Gelis.
TouchFX gives corporates and investors transparency in markets, added Ms. Thomas. “In FX there is not just one market place like in equities where transparency has existed for a while; FX should get to that point. Unlike asset managers who have a fiduciary responsibility to ensure best price, corporates don’t but they still want and need best execution. TouchFX shows the interbank rate and corporates can benchmark their trades against that.” This may contribute to some tense treasury wallet discussion with banks, as well as toward the product and service “unbundling” trend resulting from the new normal in bank relationships and the rise of third-party fintech solutions many highlighted at the conference.
Fintech may be the term du jour, but what they bring are often solutions to regulatory inefficiencies, at least that is the case for Earthport, a “regtech” (as they call themselves) specializing in making low-value cross-border/FX payments more efficient and less costly. Earthport’s Peter Klein participated in the last panel of the conference, “Cutting through the hype” of fintech, with participants from both banks and fintechs and led by Financial Times Alphaville blogger Izabella Kaminska. On the not so imminent demise of banks, Mr. Klein noted that “SMEs [in particular] have financial service gaps fintechs can fill efficiently but you still need banks at the back.”
Banks on their side are increasingly embracing innovation from the fintech space to bring new solutions to their customers, which validates the Mr. Taylor’s “universal bank as a smartphone” thesis above. As his BAML colleague Matthew Davies, Co-Head of EMEA Product Management, GTS, said: “By partnering with a fintech, we can bring a product to market far more effectively; that’s how banks can be agile.”