It is a new paradigm change out there, in the Fintech field.
As the challenges for innovation knocks on the door, (as opportunity often does), Fintech companies are finding themselves addressing the need for collaborations, role model emulations to make themselves look better at the showplace with the new and the latest.
Strategic focus and innovation is key. With technology upgrades proliferating with multiple applications in the banking and other financial sectors, CEOs and industry leaders are constantly working on course corrections and seeking new inroads in Fintech development space, including a possible holding hands with financial institutions, once considered taboo.
Yet, the task is easier said than done. Many institutional and Fintech professionals in research & development find the going tough when they have to choose between compatible partners on one hand, and are overwhelmed by the sheer size of the opportunity areas in the field of digitization and cyber-based financial transactions, on the other.
Steering high-tech intellectual content through shared or even ‘secure’ cyberspace is risky game. And, many find themselves plunging into an uncertainty over the outcome of their collaborations and with them, technological inputs. With ever-growing choice of apps available, the assignments for Fintech professionals and the financial institutions only get riskier as they tend to spread limited resources rather thinly over larger application areas.
The report of a recent study conducted by Price Water Coopers, titled, PwC Global FinTech Report 2017, establishes the accelerating pace at which technology and innovation has been overtaking the Fintech sector.
According to the Report, a unique development is taking place in the industry where Fintech companies are vying with each other to gain collaborations with mainstream financial institutions, yet the two, as stand-alone entities, do run as competitors within the industry!
Nearly 90% of financial institutions surveyed by the Research team were of the opinion that they are losing business to Fintech companies, worldwide. According to PwC, this is where strategic innovation has recently found its place.
A scenario which has been hitherto looked upon as the ‘battlefield of rivals’, now quite certainly looks like home ground for the two players to work out their deals. In sum, a ‘strategic symbiosis’ is taking over, and over 80% of the participants surveyed agreed that there shall be an increase in their Fintech partnerships in the next five years, the Report adds. A majority of these corporates are gearing up to the times with R&D and innovation to match the challenges of tomorrow.
One of the main reasons for this change in mindset and strategic focus is the growing demand for newer and better customer services – created more by a ‘pull’ marketing phenomenon than the traditional ‘push’ strategy.
Sharpening operational efficiency and rising to meet consumer demands have become the inevitable drive-forces of innovation and change in the banking industry today.
Those institutions and Fintech companies that seem to conquer the challenge of transformation and change do have clarity of purpose and are strategically market-oriented in their customer services.
This helps them to choose their strategic partners and also direct their precious resources into the right formats and channels which will deliver valuable returns.
Who takes the executive decisions to steer these entities into such uncharted territories and manage them well?
The study shows that in virtually all cases, it is the Head of Research, who is probably a Board Member, who initiates the change and influences decisions.
An active and co-ordinated participation from the leadership (which inevitably means the Board) combined with their astute governance and accountability actions drive the effective implementation of the innovation down the network.
The Head of Research is entirely responsible to the Board to present latest reports on market trends, innovations, upgrades, emerging technologies and new business models.
This top-down model draws considerable support in creating innovative strategies that have been clearly understood by all concerned, and thus often succeeds in leveraging the organization down the mainstream of competence and competitive advantage.
Bringing about innovative changes almost always faces other internal hurdles, as most people operating within the corporate paradigm are aware of.
‘All too often, comfort with established ways of working or concerns over the disruptive impact on product dynamics mean that innovation comes up against institutional resistance.’, says one industry expert.
The PwC Global FinTech Report underlines this viewpoint: ‘organisational ‘antibodies’ that can stifle innovation include a mindset that sees it as a matter for the R&D lab rather than a key part of mainstream operations. New ideas can also be smothered in a blanket of slow and bureaucratic decision making.’
Much victory comes to those persistent management professionals who, in their professional wisdom and masterminding experience of the marketplace, embrace innovation as an ongoing responsibility and bring about strategic change to address the challenges of an ever-growing and perhaps intimidating Fintech environment of today and tomorrow.