Finance – from Bricks and Mortar to Financial Technologies


PNB Banka is the Official Bank for the Digital Freedom Festival 2018, continuing successful cooperation for the third year. Together we’re aiming to promote discussion about fintech topics and help startup businesses attract investment with the addition of the first ever DFF Investor Day, held in the PNB Investor Lounge on November 30th. The day will include discussions on the impact of new technologies on the banking and finance sector, as well pitch competitions by 500 Startups and Rockstart, and investor speed-dating. We interviewed PNB Banka Board Chair Oliver Bramwell to find out more about how technological innovation is influencing the financial sector.


DFF: As a large part of banking move online, how do you see the role of physical brick and mortar branches?

Oliver: The main role of physical banks is moving towards becoming a place to meet bankers. Face-to-face meetings add an aspect of legitimacy and trust, which people especially want when it comes to such things as mortgages or wealth and asset management. Nowadays these services are available online and people have a certain level of trust in these services, but people still value personal interaction and want to be assured that they not only won’t lose their money, but will actually earn money on it. SMEs, startups and mid-sized companies will do a lot of their banking shopping online, but corporations also tend to prefer personal meetings to digital interactions, so brick and mortar branches aren’t disappearing anytime soon. People will still want a physical advisory space to talk about banking products.


DFF: How are innovations in financial technologies changing the way PNB runs operations?

Oliver: Traditional financial institutions like our are made up of several integrated building blocks, which when taken apart are very hard to put back together in a nice way. When you’re  talking about changing the core of the banking system that’s a huge project, so these changes don’t happen as fast as we would like. When a new technology is developed affecting one of these blocks, it takes a while to prepare the whole system for the implementation of the technological change. Regulatory requirements are frequently a main catalyst helping to push traditional banks towards adopting new technologies. For example when the Anti-Money Laundering regulations came into effect all the banks went out shopping for the latest IT solutions. There were no legacy solutions, so banks could find the best solution for the right price.


DFF: What role do startups play in modern banking, and how does PNB Banka cooperate with or support startups?

Oliver: The best thing traditional institutions can contribute to startup development is infrastructure. This can come in the form of co-working spaces or accelerator spaces, and includes our participation in the DFF. That’s why we’re getting involved in the first ever DFF Investor Day, not only to discuss relevant fintech topics, but also to help startups attract investment and connect them with international advisors. If we didn’t have the DFF, we’d have lots of smaller government initiatives, but we also need a larger commercial platform and DFF provides that. We’re not investors, we’re not part of the venture capital and angel investor world so we don’t finance startups, but we can offer such things as a special startup business package we’ve put together with smart ID, mobile transactions and other banking solutions.


DFF: All three Baltic countries have been experiencing a fintech boom. What are some of the things that have contributed to this regional development?

Oliver: Many startups created in Latvia go abroad in search of market volume, but I think it’s great when they promote Latvia at the same time, it’s part of their brand. We need more of those types of ambassadors. There are a lot of smart people who come through the education system and the development of Skype in the Baltics helped develop experience and expertise. Though we also see examples where people get trained, and once they’ve reached a certain level they go to another business abroad. Their example also helped attract funding to the region, but I think there’s still a lot more governments can to to help support startups.


DFF: What are some of the up-and-coming technologies, that could be next to influence the banking industry?

Oliver: Blockchain technologies like Bitcoin came in with a lot of hype, but people are now finally starting to understand all the different uses for the technological infrastructure as a platform outside of digital currencies for things like smarter identification, and I think there are still opportunities for someone to come up with something really smart. It’s nice to see that there is a competitive landscape. Artificial intelligence innovations are also changing the way the fintechs are finding and assessing clients, so more money is going into research and development. If you can write smart AI code, you can screen the whole internet.


DFF: How are new technologies changing the concept of money?

Oliver: Money doesn’t necessarily have to be physical, but everyone enjoys having a medium. You have to have a medium that isn’t a good itself for exchange, as long as it’s neutral politically and materialistically. Otherwise you get back to things like bartering, and that would be terrible. New technologies like cryptocurrencies are getting more popular, but most people still don’t understand completely how they work, so money is still quite popular, there is still a lot of cash.


DFF: New technologies are changing the way banking works around the world. Why is it important for PNB to support the discussion around these changes at the DFF?

Oliver: If you look at history, every single company that has been world-leading has always been at the forefront technologically. If you want to be one of the best global brands, then you have to innovate. There are two worlds when it comes to financial institutions – there are traditional ones, and then there are the fintech startups built from scratch around these new technologies. For traditional financial institutions it takes a lot more time to adapt to technological changes, but even larger banks will eventually have to implement these innovations and it’s important to have discussions around the benefits, risks and future challenges. For me personally the fintech startups are most interesting, because you can not only meet your competition, but also see where new trends are coming from. It’s also great to see and try out in person new virtual reality technologies, which isn’t finance, but it’s really cool!


About Investor Day Powered by PNB Banka

Investor Day powered by PNB Banka is designed exclusively for the benefit of investors and startups attending the DFF. This will be a unique opportunity to meet all the top players in the investment scene, form new connections and discover the next big thing in the industry. We know your time is valuable, so we aim to promote meaningful encounters by placing less emphasis on the DFF stage program. Investor Day will take place on November 30th, and attendance requires a DFF investor or startup pass.


About the Digital Freedom Festival

IThe Digital Freedom Festival is a global technology, startup, policy and lifestyle festival, which will be held on November 30th and December 1st in Riga. It will gather technology and startup entrepreneurs, experts, policymakers, investors, journalists and motivational speakers from all over the world to look for answers to how entrepreneurs, society and and policymakers can better cooperate and use the benefits provided by technology.