The 6th of February was the date for the 5th BarCampBank London. Held at the same loation as last years, Nesta, it brought together around a hundred or so financial service innovation types to discuss the hot topics of the moment. Last year there had been a focus on alternative currencies and economies this year they were largely absent from the sessions (the ones I attended anyway). NFC was also another big topic last year but this year it felt like the disillusionment was setting in.
I was kindly asked by conference organiser Dave Birch to help group the themes from the post it note avalanche at the start of the BarCamp. It allowed me to be biased and shape a session on one of my current pet topics, APIs/Open Data, although to be honest I did not have to be that biased as it was a topic a lot of other people wanted to discuss.
‘What does a bank API look like?’ was the question used to frame the discussion. I was asked to lead the talk which was a tad daunting with some of the experts in the room thankfully I don’t think I made too much of an idiot of myself. The first job was to explain what an API was to the mixed knowledge group. An API is an Application Programming Interface and as the name implies it allows programs and services to connect and interact with it to control the business process it sits on top of. My primary focus is around creating APIs to deliver access to a customer’s transaction data so if they so desire they could use a third party PFM, like Mint.
But what is the business benefit of an API? Why would a bank open up its data to 3rd parties when they can keep all that good stuff for themselves? Well the discussion coverd this quite a bit and the conclusion was that the biggest benefit is around internal development. The API should be used to build your own tools. If banks had APIs then building tablet, mobile or Internet Fridge banking apps would be a piece of cake.
Obviously the immediate concern when anyone mentions an API plugged into the financial transaction data of customers is what about the hackers?! Yes an API to financial data would be quite the honey pot but surely these issues can be overcome. If PayPal (the developer arm is now known as X Commerce) can provide API access to some of its services then why can’t other banks?
In Germany they have had APIs of a sort for quite some time in the form of the FinTS set of services. We were lucky enough to have several people from Germany in the group and they said that while FinTS was useful the way it had been implemented by the banks varied wildly between institutions. Open standards are desperately needed.
We were lucky enough to be joined by Simon Redfern from the Open Bank Project. An organisation looking to build a layer for the banks to plug into and then provide some standard data feeds in JSON with some RESTful APIs to hook into. Unsurprisingly they have not signed up any banks to take this on just yet but on paper this looks like just the kind of thing needed.
We discussed what the role of Swift was in all this. The Society for Worldwide Interbank Financial Telecommunication is a global messaging network which deals with payment instructions. They would not really have access to the customer level data I am interested in but it would certainly be interesting to plug an API into this world.
Another angle was the Government. In the UK we have the MiData project kicking off at the moment. With the vision of handing customer data back to the customers. Some banks are signed up to this but as yet the detail around how data will be provided is not that well detailed and I think data extracts maybe preferred over API type access.
This is a really interesting topic that I think will be a major focus for the banking industry over the next 18-24 months.
Second session I attended was entitled ‘Does social media change everything or nothing in financial services’ I am not sure about the title of this thing (maybe replace social media with ‘ever evolving web’) but I like the sentiment.
I think the obvious thoughts are the likes of Google and Facebook will sweep aside the banking industry as we know it. I really don’t agree with that. Those companies have no interest in being banks. They might want some of that sweet, sweet financial data to better tune their marketing efforts but they don’t want the hassle of Basel 3 compliance etc.
That being said you cannot ignore the effect the web continues to have on society and banking is certainly not exempt from that. The two networks need to get closer and I believe the two can coexist. The banking one may look a bit long in the tooth comparatively but it is pretty good a transferring trillions of dollars per day without much issue (the small matter of global economics withstanding).
My third choice of the day was ‘Can you imagine a world with no POS terminals or plastic payment cards’. Like the previous session the big assumption is that mobile devices will change the way we pay to such an extent these mechanisms of trade will be consigned to the dustbin. Square might be the FS darling in the US at the moment but wide scale merchant usage at a corporate level will not be possible with such a system (the mag stripe alone makes it unusable outside the US). The discussion focussed around what the big players in this market actually do and why displacing them will be very hard.
The key element being the payment schemes and the functionality contained within them e.g. chargebacks, where customers of Visa could demand a refund from them if the goods the customer purchased from a third party were substandard. Are the new players going to be able to build these huge complex processes? The feeling from some part of the group was that this was maybe a bridge too far. This means the big players will probably stay as the big players…also Visa have a pretty big stake in Square anyway.
A slightly bizarre end to the day in the form of something that I had found difficult in the last session i.e. imagining a future without something so fundamental to pretty much everything we do today ‘What would be the plot of a movie about the future of the financial system?’.
Now obviously the premise was quickly established that the financial system as we knew it had completely failed (crippling virus or AI reached such a level of sentience that the HFT algorithms ran riot and heavily funded biotech which lead to the creation of an army of financially trading cyborgs that also had a physical presence so they could take over the world or a more plausible continuation of the real world events going on now). Either way the way things work today cease to be. Trying to think through what would happen if you no longer had any access to money. No way to buy. No reason to work. Hording would begin. Looting would break out. Society would surely break down. This would be a pretty depressing dystopian future so we had to try and inject some happy/hippy transitions.
Obviously barter systems would flourish (They have seen a resurgence in Greece recently) and the world would find new means of trade and currency and the things would be right again (as the rebel survivors successfully defeat the evil cyborgs) and no one would ever be short sighted or greedy again. There was a slight twist in the end in the form of a very clichéd cut to an underground bunker with a lone evil banking cyborg that had escaped the cull. Can’t see it getting made any time soon with a plot like that, I also suspect securing funding would be very difficult.
I personally got more out of this year’s event over last years. Not sure if that was to do with the more relevant/interesting topics or just feeling more comfortable with the format/audience/my willingness to shoot my mouth off. There was still a lack of (UK) bankers at the event which was a bit of a shame…that being said who wants a load of bankers at an innovation event anyway?
Nice work once again by Mr Birch and his associated organisers. Finovate Europe which was held the day after has meant some of Europe’s smartest in the industry come together in London for a few days. Organising events at either side of it is a no brainer. Same again next year please maybe with a few more events added on to make a week of it.
Hey, Great article Aden. Nicely set out and gives a good idea of what the session was all about. You answered my first thought early on – which is how to keep back the commercially or security-sensitive stuff while still making it interesting.
Thanks for making the mention of the Internet Fridge a link – that I did want to read about – for two reasons, first I thought about the way a fridge door becomes the home “water cooler” where all the interesting stuff is pinned. But secondly because of something that NCR did back in 1998 that everyone laughed at back then.
I used to work for NCR and they consistently lead in the banking and retail space – first with ATM’s, first with self-service retail cash-outs, etc.
This was their Internet Microwave – remember, this was 1998!
Amazing that Wired described it as “mad” then. Goes to show…
Maybe it would be worth you hooking up with NCR more formally?
Anyway – great article as I said. Thanks for spending the time to do it.
[…] Davies has posted about his views of BarCampBank London 5, including information on some of the more technical aspects discu….] Share this:TwitterStumbleUponDiggRedditEmailLike this:LikeBe the first to like this […]
[…] can find useful a great post by Aden Davies, who’ve delved a bit more deeply in several topics that were covered in this successful […]
I know this is old news (I’m tech, not finance, so specific markets like fintech get overlooked in favour of shiny new architecture ideas, hardware, “does everything” platforms or fleshing out possible new projects), but I’ve just been catching onto this world while thinking around personal finance in relation to Behavioural Economics so I’m running to catch up.
Banking APIs (out more the marketplace they’d create) would help a bunch in helping people reform & streamline their spending behaviour and amounting it with personal values. The EU PSD2 sounds pretty good, it they can get it moving!
It seems to me however, that financial services are jittery about transparency, for fear it with cut consumer spend, and reduce income from credit services.
To me, that’s wrongheaded, it just needs an adjustment in their revenue model & (considering the power of aligning spend of the masses with wider goals/values) could even increase overall spend (of not on credit) to the benefit of the transaction processors.
I did read elsewhere about distributing personal holdings across service vendors, but that feels like it would shift the lock-in from finance to actual vendors and individual products… …I like the +ve cashflow aspect, but it might sway overall consumer behaviour towards a few behemoths (like the supermarket trend) unless fund movement is almost friction free…
‘What would be the plot of a movie about the future of the financial system?’
At the time of your article, I might have pointed at FightClub for inspiration, but in 2015, the TV series “Mr Robot” would fit the bill pretty well!