This year’s edition of Money20/20 was back in full force. It was a well-attended event by all players in the ecosystem, a definitive difference from last year when lingering COVID-19 travel restrictions kept many would-be attendees on the sideline.
The conversation among the 13,000 registered attendees in Las Vegas, and countless others working the periphery, expanded beyond last year’s darling – cryptocurrency – to encompass other issues financial institutions will face as they head into a potentially turbulent 2023. This year’s top themes included safety and security, innovation, and evolving regulation.
Here are a few recurring observations from our time there...
No Shortage of Regulatory Opinions
Leaders of federal regulatory agencies were prominent figures at Money20/20 this year, a sign of the growing role government policy plays in our industry. CFPB Director Rohit Chopra used the event to announce his agency’s intent to reactivate its Section 1033 authority – a technical way to say he wants to make it easier for consumers to switch banks and take their transaction data with them.
“Consumers should own the ledger,” Chopra said.
Chopra compared the approach to the FCC’s number portability mandate that allows phone customers to switch carriers. Though it doesn’t match the full criteria of open banking, this change would certainly move the US financial system in that direction if enacted.
During a fireside chat, Federal Reserve Board Member Chris Waller shared a broad array of thoughts. He touted the imminent launch of the FedNow network – slated for May or June – as a significant step in bringing ubiquity to real-time payments. “We’re building the interstate highway,” he said, encouraging the marketplace to “build the cool stuff by the roadside” – a reference to customer-facing utilities.
Keeping an Eye on Next-Gen Tech
There was no shortage of focus on next gen technology in the exhibit hall and on stage. Bain’s Thomas Olsen suggested that Web 3.0’s development would be “gradual and messy, just like the internet was,” advising players not to underestimate incumbent power.
In a separate presentation, Olsen acknowledged that the timing of metaverse investments will be a big challenge for financial institutions.
Similarly, Meta’s Stephane Kasriel advised that companies begin the journey by building a metaverse presence that looks much like their physical one. “It’s almost certainly not the right answer, but a logical place to start,” he said.
More Chatter on Digital Assets
While not as prevalent as it was in 2021, the topic of digital assets still found its way into conversations at this year’s event.
Adrienne Harris, Superintendent of New York’s Department of Financial Services, championed her state’s leadership role in crypto regulation. She argued that companies appreciate the clarity that comes with guidance, claiming that 46% of crypto investment has been made through NY-regulated entities. Harris also equated the situation with the 1800s, when New York banking laws predated federal ones.
Newly released McKinsey research found that consumer interest in crypto remains high, despite 2022’s price instability across several coins.
On the high-profile topic of central bank digital currencies (CBDCs), the Fed’s Waller revealed that he’s not a fan and has yet to hear a good business case for them. However, he conceded that there are differing opinions on this topic – suggesting a long road ahead.
The Bottom Line
Despite the economic challenges that have dominated recent headlines, the energy evident on the ground at Money20/20 indicates that innovation will continue even as banks and credit unions prepare themselves for challenging headwinds.
SRM will continue to closely monitor ongoing developments, including regulation, real-time payments, and digital assets.
Keith Ash, Senior Vice President at SRM, has decades of experience in the banking industry, advising leading financial institutions on their strategic initiatives. Further inquiries may be made by emailing Keith at kash@srmcorp.com.
