Money20/20 Recap

Emerging Themes in Fintech for 2024 and beyond.

Zelle and Pix original (limited) crew meet-up. UPI was hiding somewhere.

Money20/20 wrapped up with its usual whirlwind of meetings and packed agendas, but this year marked a subtle yet telling shift in fintech priorities. As the industry’s annual gathering took over Las Vegas, it was clear that restaurants and suites hosted much of the action, a departure from the bustling expo floors of previous years. While I did not attend the exhibit floor (being one of these suite bounded actors), the word was fewer companies did opt for booths and were largely concentrated in service-based areas—(fraud, security, regtech, and payments)—This seemed to be a departure from the buzz and flashier sectors like BaaS, neobanks, lending, and crypto from last year. Meanwhile, AI made its presence felt (Everybody gets AI as Oprah would say!), including a robot dog that prowled the event (and attendees chasing it to take photos), reminding attendees that the AI wave is here to stay.

Here’s a look at the trends that stole the spotlight:

 1. Open Banking and Cash Flow Underwriting on the Rise

Open banking has cemented its role as a pillar in the financial ecosystem, a trend further reinforced by the finalization of the 1033 ruling. When the CFPB announced it at the Federal Reserve of Philadelphia Fintech Conference, you could hear the silence in the room and yet, the buzzing mobiles with texts and emails cascading on the what it meant. It seems these discussions were still ongoing at the conference. This regulation makes it easier for consumers to share their data, giving lenders and fintech firms more robust insights into creditworthiness. Some companies are jockeying to be at the forefront, enabling businesses to unlock the potential of consumer data in real time. I remember when Yodlee would have been a strong contender but now it’s Plaid playground. In similar moment, Nium announced Verify which is mostly Account Verification which Yodlee also dominated for years. And yet, with instant payment, and balance checks, account verification is the first step you need to do to keep fraud (and worst) at bay.

Cash flow underwriting (Everyone gets a micro-loan as Oprah would say!) also gained traction as traditional credit metrics evolve. This approach not only allows lenders to dig deeper into a consumer’s financial health but also offers them a second chance to convert declines into approvals. By prompting customers to share their data, firms can apply basic decisioning rules, improving access to credit and creating a smoother path for applicants. Credit scoring is an outdated system in the US and needs to go in my humble opinion.

2. Fintech Lenders Seeking New Opportunities in a Changing Market

Talking about loans, in a shifting interest rate environment, fintech lenders are exploring new avenues for growth. With a slight decrease in borrowing costs and increasing credit card rates due to CFPB’s focus on late fees, there is a substantial opportunity to refinance revolving debt. Yet the challenge remains: differentiating in a competitive landscape and acquiring customers without ballooning acquisition costs. Creative strategies to attract and retain consumers will be crucial in capturing this market segment effectively. And BNPL may have run its full course as we know it. So what’s next?

3. Fraud Detection and Prevention in the Spotlight (again)

Fraud prevention remains a focal point, and the landscape is shifting. Larger players, such as Visa and others, are investing through strategic acquisitions, underscoring the importance of a consolidated approach in a rapidly evolving field. Coopetitive partnerships seem to be on the horizon for few initiatives.

In particular, first-party fraud continues to vex institutions, with innovative solutions like Socure’s identity verification and new fraud models offering hope. But there are so many more opportunities especially supporting merchants and using ID tokenization as an alternative to usual funding sources. The pay-with-who-you-are was the promise of the original round of consumer biometrics solutions back in the early 2010s and FIDO alliance was its standard bearer on a certain level. Mastercard spent quite some time at the conference discussing its approach to ID. GenAI is disrupting legacy fraud detection methods, including bot detection and document verification, by adding a layer of adaptability and intelligence.

4. Rising Threat of Scams: A Call for Regulation and Education

As payments transition to real-time, scams are proliferating at a concerning rate, revealing cracks in the U.S. regulatory framework. Unlike other countries, the U.S. still lags in coordinated action to address these risks. Regulatory bodies need to step up with aggressive, unified measures, as highlighted in recent reports on the issue.

In the interim, companies must prioritize education for both customers and employees, focusing on fostering awareness of the latest scam tactics. I wrote about how easy it is to get drop into the turmoil of fraud.

5. Banking Partner Shakeout Continues

A notable shakeout in partner banking dominated the event, with Column and Lead emerging as trusted names as fintechs exit relationships with weaker institutions. This migration hints at a more discerning approach to banking partnerships, especially as new regulatory standards and economic pressures demand reliability and stability. As fintechs are more cautious in partnering with the right sponsor banks, sponsor banks are also trying to find new solutions and technology to re-acquire a level of trust and control demanded by regulators. Digital twin core banking concept is a nice option to consider.

6. The Generative AI Surge—Moving Beyond Prompt Engineering

Generative AI was, unsurprisingly, a major theme, with a slew of companies showcasing applications ranging from customer service automation to content creation (Everyone gets an AI agent as Oprah would say!). However, many solutions are still tethered to basic prompt engineering, which alone is not a viable foundation for a business. The true transformation in generative AI will come when companies fully integrate AI to redefine workflows, build robust data architectures, and ensure accuracy and consistency. The companies that can blend generative AI with reimagined business processes are the ones poised to lead the next phase of digital transformation. Using AI for better risk modeling and threat detection would be a step in the right direction. As long as hallucinations are clearly understood and controlled.

The Road Ahead: Looking Beyond the Hype

Money20/20’s emphasis on structural improvements in fraud prevention, data-sharing regulations, and fintech lending strategies signals a maturing industry focused on resilience. As open banking and generative AI continue to shape the future of fintech, the companies that lean into sustainable growth and robust infrastructure will set the tone for the industry in 2024 and beyond. It’s a way to stay EnVogue (punt absolutely intended).

However, the format of the conference itself is not as attractive as it used to be. The cost of attending is becoming so prohibitive that a LOT of people come to Las Vegas and meet offsite. While the Venetian and the Palazzo restaurants and bars are saturated (Everyone gets a Starbucks to go as Oprah would say!), the most productive meetings were held in private rooms of fancy restaurants in other hotels. Why? Because people needed to escape the madness to do business. Money20/20 has a format problem. Hopefully, it will be fixed. But as for everyone, it was awesome to reconnect with friends, former colleagues, partners, clients. And yes, I sabred a bottle of Champagne! See you next year!