But the Fintech industry would be wise to consult with other and more established players on the field – those who already know the rules – and not forget to question why the rules are the way they are. If the Fintech industry does this, it might become an enjoyable ride for all in the financial game, perhaps even resulting in collaborations on the next revolutionary products on the market, says Michael Albrechtslund, who was recently named chief executive of the non-profit Danish Finance Society and its sister organization, the Danish CFA Society.
"We have a societal calling in The Danish Finance Society, saying that we must help the Fintech industry to recast the established world's experiences into new opportunities, new methods, and new products for the benefit of both parties," Albrechtslund tells FW Asset Management.
Learn integrity and ethics from us
The Danish Finance Society's new CEO's wish is for the Fintech sector to learn from the financial world, thus avoiding any wrong steps into inappropriate or illegal products. He names Uber and Airbnb as examples of products that have been under heavy fire ever since they were launched in Denmark.
None of the services were actually deemed illegal, but they were met with much resentment and opposition.
"If you make an IT product in the financial sector, it's important to understand that banks, for example, are subject to a wide range of restrictions that could hinder the desired functionalities. Or the product might simply turn out to be illegal," he explains.
Albrechtslund has two bits of advice to the inhabitants of the Fintech world. First, that they would simply benefit from joining The Danish Finance Society. Next, it would be wise for them to watch and learn from the experiences of the closely related financial sector.
"Looking at the financial sector, it is mostly comprised of very decent, upright people. Overall, they are people who are interested in behaving well and doing right by their customers. This is not to say that Fintech people don't also want to do right and treat their customers well. But they don't have the classic virtues that old, traditional banking companies have," Albrechtslund says.
Perhaps a bit tongue-in-cheek, but couldn't you say that it might actually be a good thing...?
"Yes, you could. CFA Society Danmark is part of a society of about 150,000 charterholders with a code of conduct and ethical guidelines that all members have signed. There is a book in the CFA world, the Standard Practise Handbook. It is a 294-page code of conduct. However, few Fintech companies read or commit to it. Maybe they don't have to, but they just don't have the kind of upbringing that people in the established system have. And that can both be good and bad," he explains as to why he would like to see more dialogue between the Fintech industry and the financial sector.
Rules should be the same for all
The Fintech industry snapping at the heels of the established sector is gradually becoming more of a serious threat as Fintech grows stronger. The financial sector has been quick to embrace many of the technological opportunities, such as the mobile apps Mobilepay, Darwin, and June.
It worries Albrechtslund a bit that the rules are not identical for the Fintech sector and the financial sector. The asymmetry could cause problems, he thinks:
"For example, there are certain rules for how you are allowed to promote your returns on the market, so you don't compare apples and oranges. Fintech companies are not subject to the same rules. Things like these are worrying. How on earth do you make sure that proper conduct spreads to these new players," Albrechtslund wonders. This is where he wants the world to understand that he and The Danish Finance Society are offering their alliance to the new players, and they are willing to work together by providing knowledge and ethical concepts.
Many of the new players are the result of a kind of rebellion against the established financial institutions. Players who want to bypass the established system because they believe that the established part of the sector has been too dominant on the market. In light of that, couldn't you say that the new players have a Code of Conduct pre-installed even though it's not 294 pages long?
"Competition is always good, but it has to be on fair and comparable conditions. My point is really that I would like to propose a dialogue between the old world and the new. To build a bridge between the two, carry relevant experience across from the old world to the new world. It would solve ethical dilemmas and benefit both people in the business and the customers," Albrechtslund concludes.
Michael Albrechtslund passes the digital baton to Ken Villum Klausen, CEO and founder of mobile bank Lunar Way.
English Edit: Marie Honoré