Fintech, or financial technology, has shaped the way we all operate financially. Advancements in technology and the cost-reduction of that technology have allowed for an easier penetration into a financial market that was once monopolised by large corporations.
Start-up companies that are driven by passion for innovation and creativity are producing ideas that stagnant large entities are unable to compete with in a speed to market sense.
In an increasingly competitive and cautious world, those who are willing to take risks, step out of their comfort zone and into the realm of uncertainty will be those who will reap the biggest rewards (Forbes). This is true not only for our businesses, but, for our personal life as well. We have all heard the expression that comfort leads to complacency, and for some large companies that can lead to a decline in market share.
Financial software company Intuit introduced an innovative idea to combat market loss caused by stagnation and an increasing start-up presence within the Fintech industry – which was to mimic start-ups themselves. Intuit created a subsidiary, SnapTax, separate from the policies and procedures that held Intuit back from new innovation.
SnapTax was modelled after popular movement and book ‘The Lean Start-up’. The idea was that new products could be achieved through pivoting quickly and adopting a reactive work culture. Something that is often difficult to achieve in a large corporation.
Through hiring entrepreneurs and technology focused individuals, SnapTax continuously improved from their initial product ideas to develop the first mobile app that allowed users to file taxes straight from their smartphone. Through understanding the needs of the customer and changing their product(s) accordingly they were able to recapture much of the market share they were originally losing.
Intuit has become the gold standard of revolution among large Fintech entities, with Forbes even creating an article surrounding the Intuit innovation culture. Which can be found here.
What Intuit accomplished can teach large financial corporations that by being reactive to the market, listening to customers and hiring entrepreneurs or technically focused individuals, that they can compete in an increasingly start-up focused market.
What does this mean for large financial organisations moving forward?
Consumers are flooded by options, bombarded by advertisements and have the power of choice. Listening to the customers wants and needs AND acting on this are critical to maintaining or growing market share. This all starts with who you hire within your company.
Things to consider when hiring for an increasingly fintech focused market:
Banking should no longer be primarily focused around brick and mortar. We, as a society, are spending an increasing amount of time attached to our technological devices, with our wants driven by ease of use and adaptation to our favourite electronics. Hiring more tech savvy individuals will be key to thinking of innovative solutions to these new-age desires.
Rarely does creativity come from a homogenous group. To truly compete with the passionate competition of start-ups, hiring a more diverse and inclusive group will help to see issues previously unthought of.
An area where start-up competitors may struggle to compete with large entities is the ability to provide personalised customer service – purely through a lack of resources. Listen to your customers wants and needs by hiring individuals with customer-centric soft skills. There is a case for buyers demanding more personalised service and the larger institutions are in a position to deliver this if they want to focus on service.
Entrepreneurs have the ability to think outside the box and roll with the punches. One of the key takeaways from the ‘Lean Start-up’ movement is to be reactive to the consumer environment. Employing entrepreneurs throughout your organisation will allow for constant innovation into the changing customer landscape.
We could write a whole article on this (and will be). Though for now, from a candidate perspective, organisations are hiring for the future of work in mind. At this point it focuses on three key themes; technology (software development, cloud, UX/CX design), data and commercial capability (including leadership). In other words, if the data can point to customer behaviours and information then the capability to improve technology to follow up on this will be required. The first two are driven through the value of commercially astute employees, at all levels. The days of “process only” roles are fading fast.
Other things to consider:
To truly mimic innovation culture, you don’t necessarily need to create subsidiaries like Intuit, however, taking risks, allowing mistakes to happen and promoting a culture of creativity may be the key to recapturing market share taken by smaller start-up companies.
Place ‘suggestion boxes’ around the organisation and don’t criticise ideas. Allow the free-flow of thought to spread throughout the organisation and don’t allow policies or procedures to hinder that. he red tape that held back previous innovation needs to be eliminated from employee mindsets.
As stated above, products/services should be honed based on consumers’ wants and needs. The advantage large financial corporations have over smaller start-ups is access to resources, brand and buying power. The ability to survey large groups of individuals, create focus groups and gather significant data from the market is more difficult for smaller companies to accomplish. Using this information that has been gathered allows for specific product targeting.
Issues with Fintech can cause a huge lapse in customer loyalty and overall satisfaction. Problems with the technology that we have become accustomed to such as mobile banking applications, smart ATMs etc. - can have profound effect on how we can access our funds and live out our lives.
Ensuring technical systems are up-to-date, inspiring innovation, building in the agility to respond, create, execute and allowing free flowing thought is key to large financial entities operating in an increasingly start-up focused world.
As a potential candidate in the new age of Fintech the points from above should provide you some idea as to where large corporates may head in their hiring.