Pascal Bouvier is a partner at Santander InnoVentures. As a venture capitalist and an entrepreneur, he’s seen both sides of fintech – and all stages of the hype cycle. He’s got a handy – and rather funny – reference below for anyone perplexed by the language of fintech:
Accelerators: Where startups go to learn. What they learn is anybody’s guess. See Deccelerators.
Alternative Lending: An alternative way to make the same mistakes in lending, over and over again. See Crowdfunding.
API (Application Programming Interface): A set of routines and protocols wizards use to develop magical and frictionless interaction between software applications. Alternatively, an acronym muggles use when pretending to be wizards.
Big Data: Applied to most data analytics projects to produce negative returns.
Bitcoin Blockchain: A group of digital prisoners, chained to one another, and bound to perform menial digital tasks recorded on a digital ledger in return for the promise of a better future life.
Cards: Credit, Debit, Reloadable, Gift. The most profitable scam in the history of the financial services industry.
Core Systems: The tools with which service providers keep banks, insurance companies, asset managers hostages.
Cryptocurrency: A currency which adheres or belongs secretly to a party, sect, or other group.
Customers: The one thing most fintech startups are still looking for. See Traction.
Disintermediation: The act of creating another overlord, as in “My API will rule over your API.” See API.
Equity Crowdfunding: Platforms that may provide much work for litigation lawyers in the future.
Financial Inclusion: An issue solved by technology according to blockchain enthusiasts. A profitability issue according to financial services incumbents. A game changer according to social impact investors.
Fintech: Neither “Fin” nor “Tech”. Modern day alchemical process.
Fraud: The act of defining loose operations control in order to elicit fraudulent activities which will eventually be billed at cost plus to the end user. In the payments industry, the tradeoff between convenience and privacy.
Gateway: A purgatory software interface where payments transit before reaching heaven.
Hackathons: Events that bring fintech developers, designers, corporate executives and innovation managers together around pizza. Hackathons organized around the summer solstice are sought-after events, as it is believed pizza tastes better during that period of the year.
Incubators: Where corporations are able to smother good fintech ideas to death.
Interest Rate(s): A conceptual think piece for most fintech startups. Baudrillard’s famous tirade comes to mind when addressing the Sorbonne in 1968, “If interest rates were so important we would have used the term FinInt or IntTech, not fintech.”
Jinn: Spirit capable of appearing in human or animal form and influencing VC investors, corporations and startups alike via consulting analysis, recommendations, white papers. See White Papers.
Know Your Customer (KYC): The process whereby a business weighs the cost of verifying a client’s identity against the profitability of said client. For a fintech startup, that which will be developed and financed when the sooner of a cease and desist letter from a regulator is received or a $100 million funding round is closed, maybe.
Lead Generation: A poor man’s version of revenue building.
Licence(s): Put or Call Options that give a regulator the right but not the obligation to levy fines in the future based on real or perceived violations of the terms of the license granted.
Millennials: What fintech startups say they focus on and financial services incumbents know they have no clue about. See Customers.
Non Performing Loans: According to alternative lenders, crowd lenders, P2P lenders, marketplace lenders, a mathematical impossibility.
Non Traditional Data Sets: Data sets you would not want your mother to know about, let alone look at.
P2P: A business model that allows people or entities that have nothing in common to do business with one another. From the word “peer” which means “complete stranger”.
Paying Customer: The rarest of species, seldom observed in the wild by startups.
Platform(s): The shoes many incumbents want to wear.
Rails (Payment): Train tracks over which steam locomotives shuffle back and forth wagons chock full of payments.
Startup (Fintech): Ancient Greek play. Can either be a tragedy or a comedy. See Entrepreneur.
Token(s): Reduces fraud, makes EMV obsolete, helps with authentication and authorization of transactions in the payments industry. In other words, a really cool and useful thing which explains why it is so darn difficult to adopt industry wide.
Underbanked: A universe of people and businesses that refuse to comply with traditional profitability measures as defined by financial services incumbents.
Unicorn: Animal hunted for its skin by rational investors. Alternatively, animal bred for its magical properties by irrational investors.
Wallet: What any participant in the industry wants to ‘share’, as long as it is not theirs, as in “our share of the customer wallet is important for our future health.”
White Papers: Exercise in casuistry.
Zelig: Describes the act of mimicking the fintech activities of leaders, as in a “me too” fintech VC or a “me too” startup. For example: “this fintech venture fund is so zelig!”