LFP026 – Special Episode! “The Future of Banking” with Mike Laven CEO Currency Cloud

Currency Cloud

I am delighted to be joined on the show today by Mike Laven CEO of Currency Cloud (who have always been my “Fintech insiders” Fintech of choice). Currency Cloud has done $10bn of business which is a big number on anyone’s scale.

It’s a rare guest indeed that I would give so broad a topic to as the future of banking. The interweb is full of superficial so-called “thought leadership” on this matter. However Mike is one of the very few who actually have penetrating insight into this issue. He is often approached in preference to Bank CEOs to talk on the future of banking which tells you a lot not just about Mike but Fintech and Banking

Mike Laven

As gorillas go Mike is a silverback. Inter alia Mike was COO at Traiana, CEO at Infinity Financial Technology, Cohera and Coronet, and Chairman at FRS Global.


Topics discussed include:

– Mike being the first member of the minority group called Americans on the show and America’s punching massively above its weight (~4% of world’s population) in the global world of tech

– Mike’s background in international development and disaster relief (a good background for anyone changing 21stC banking? :-D)

– Mike’s familiarity with both the Valley and the UK (where he has lived for 25yrs)

– The similarity between the future of bonking and the future of banking 😀

– Mike doesn’t see the banks going away – at a minimum they will always be the trusted repository of funds (as long as money is actually just “bits in bank computers”). So Fintech’s role will be in the processes in the middle – the start and finish of the value chain will always be bank accounts

– Banks’ role in the basic infrastructure (cf mobile networks) but others can leverage that

– A Fintech which is “anti-bank” is a non-starter given the above dynamics – they must compete and collaborate

– The changes in the tech world in terms of personalising what we receive on our phones, for example, has set expectations about customisation which the banks aren’t meeting

– Banks as still stuck in a producer-driven mentality and not really customer focused

– Fintech & Banks. Banking like other industries is a supply chain – historically they have owned it all. Now it’s being disaggregated with the help of APIs and the pieces are up for grabs. Comparison with Ryan Air’s pricing model

– Banks complex organisations and legacy systems permanently handicapping them in providing a clear focused proposition that could beat a specialist fintech in any part of the value chain

– Banks main issue being that they have become vast conglomerates. They are now faced with smaller nimbler competition

– Fintech has an infinitesimal market share but massive mind share and hence have controlled the dialogue (especially against a background of seemingly continual banking scandals and hence reduced trust)

– Transparency and pricing

Identity as being the unsolved issue in banking competition right now. Unlike with mobile phones or energy companies where you can just move your account from one provider to another, if you change banks you go right back to square one trying to find utility bills etc.  Without easy portability competition will always be massively inhibited

“the main competition for banks is not fintech but smarter banks”

– Currency Cloud as doing a wholesale to retail transformation – banks do have some APIs into their systems but have a high volume barrier to entry into them (as eg the FX API required volumes are beyond 99.9% of most businesses)

– Currency Cloud as focusing on solving businesses payments hassle-factor problems not pricing-factor problems (given the view that tech will ultimately drive the price in highly liquid currencies will tend to zero)

– MIke’s attitudes to targets now $10bn has been passed. Volumes as a result of pleasing the clients and doing more business with them

– Mike believes there will continue to be an indie new FS sector and all of Fintech will not just be absorbed into Banks

– Fintech’s advantage as being able to change focus much faster – eg from transactions and towards the value of data

And much much more 🙂