The so-called tech giants Google, Apple, Facebook and Amazon (GAFA) are gaining ground in the established financial market. This development can be observed mainly in payments systems for mobile devices. More and more innovative fintechs are using digital solutions to revolutionize banking and this leads to questions about whether GAFA are trying to conquer Europe’s financial industry. What role do fintechs play? Are they a threat, partner or role model for banks? Hartmut Giesen, Business Development Manager at Hamburg’s Sutor Bank, will offer answers to these questions during the FinForward conference on October 18, 2018 as part of Fintech Week in Hamburg. Then established players, fintechs and cross-industry speakers will come to word. Around 1,500 visitors are expeced at Germany’s largest industry event of its kind. Hamburg News spoke to fintech specialist Hartmut Giesen in the run-up to the event.
Hamburg News: From German and physics studies to the fintech industry: How did that come about?
Giesen: In my “pre-fintech life”, I was involved in marketing and communication for IT and high-tech companies in the financial sector including content marketing. That topic led me to Sutor Bank, which in 2012 was seeking someone who could implement content marketing in terms of both content and technology. The digital marketing strategy evolved into a digital business strategy in several stages, which eventually led to the development of the banking platform and strategic co-operation with fintechs.
Hamburg News: Tech giants like Google or Apple are pushing their way into the financial market. What can the established banking sector expect?
Giesen: The so-called tech giants are unlikely to launch a general attack with retail or corporate banks themselves. They will probably offer financial services that are close to their core business models. They can then become tough rivals for banks in those areas and this already happening in some cases. The development is most advanced in payments. Not only Google, Apple and Amazon are active there, but also technology companies such as Wirecard, which has just ejected Commerzbank from the Dax , the payment service provider Ayden and of course Paypal are also active there.
Hamburg News: Threat, partner or role model: How do you rate the influence of fintechs on banks?
Giesen: In any case, they are a very invigorating, perhaps even a vital element for the banking industry, which may not have been thought of during periods of confrontation two to three years ago. We are currently seeing the the platform economy intersect with the “fintech movement”. Nearly all of the awe-inspiring tech giants work with platform business models that challenge banks far more than fintech rivals. Fintechs are now sought-after partners with whom banks can make themselves fit for the platform economy.
Hamburg News: What characterises the fintech ecosystem in Hamburg?
Giesen: Hamburg has managed to produce some of the most successful and highest-rated fintechs with a smaller fintech base than Berlin and Frankfurt, including Deposit Solutions/Zinspilot, Kreditech, Figo or Finanzcheck 24. This is perhaps due to the distinguishing attribute of Hamburg’s start-up scene: Here the “adults” found companies that also have the know-how to make them big. As feedback in the last years shows, a very vibrant fintech community developed with regular meetings and plenty of scope fo discussions and making contacts.
Hamburg News: Where do you see the German fintech industry in five years?
Giesen: I think we will experience a very varied and colourful fintech industry. It will sometimes consist of established banks that succeed in adapting to the platform economy in various roles, but new banks and regulated companies that started as fintechs and are by then fully-fledged, licensed players. There will also be fintechs without licenses that (survive) in the ecosystems of regulated companies. Legacy business model banks will continue to be active, each of which has proven to be the best of its kind with traditional, highly digitized strengths, such as private banks for clients with complex assets or investment banks for intricate financial transactions. Numerous non-banks will also offer financial products and services under their own names through banking as service platforms. This trend is now known as context or vertical banking. And quite clearly, the GAFA companies will offer financial services and products as a very powerful special group of non-banks close to their basic business models.
Many thanks for the interview.
Interview by Sarah Bischoff