Like any new advancement or change, fintech was first met with fear. People asked, What do technology and automation mean for the financial industry? Do I trust it? The truth of the matter is that fintech is empowering businesses and their customers to do more, with less.
This month, we attended Fearless in Fintech in New York City where panelists and attendees discussed how technology is powerfully disrupting the financial industry. It was an incredibly rewarding experience to speak at Nasdaq, an institution surrounded by so much buzz right in the center of Times Square. But even more so, it was super exciting to see what organizations are doing to disrupt the financial industry.
When you think of the financial industry, you probably think of traditional, big banks. You don’t think of these institutions as trusted advisors and you probably don’t see them as leaders in the age of technological disruption. But, despite what you may think, the financial industry is actually adapting quite well.
Here are our key learnings and trends from Fearless in Fintech:
1. Invest in the Customer, Not Just the Product
What stood out most was the emphasis on customer focus. Small companies and large companies alike were focused on better serving their customers utilizing the new technologies available. With this customer-first mindset, organizations are investing not just in their products, but in product validation and finding ways to better create their products to cater to customer needs.
2. Disruption Varies from Business to Business
While all organizations share the customer-first mentality, their disruptive tactics vary from business to business. For instance, executives at large organizations noted how they have all the funding and resources they need to deliver. Yet, they lack the speed of smaller organizations. Disrupting the industry comes at a cost for larger, established organizations. They are taking risks because they are up against legacy platforms and generally feel like they have more to lose.
Alternatively, startups have an advantage in that they have less to lose and more to gain. They are much more adaptable and can turn out products to better serve customer needs quicker than larger companies. Smaller companies have more liberty to be innovative and take a chance, but they also don’t have as much funding or resources.
As a result of these roadblocks, there has been a rise in partnerships between startups and established businesses. At the summit, a large financial corporation discussed how it has revamped its partner program, adding smaller startups with smarter technologies to their network. Taking on these startups, the larger corporation got access to fast, smart technologies without the huge risk. Taking on the larger corporation, startups got the resources and publicity they needed to further their smart technologies. It’s a win-win.
3. Discomfort is a Good Thing
Throughout the summit, there were discussions on how to better drive innovation. At the center of those conversations was the belief that discomfort is a good thing.
In order to disrupt the industry, you have to be comfortable with not having all the answers. You must be comfortable with failure and shifting away from the traditional business success model. As you can imagine, fostering an environment where it’s okay to fail and embracing uncertainty is something startups have mastered. For larger, established corporations, shifting away from the traditional business model and moving toward uncertainty proves a lot more challenging.
People have expectations for a seamless and simple process, so it’s necessary for the financial industry to use technology to cater to those expectations. While smaller fintech companies have an advantage in leading the way, larger financial corporations have the resources and influence to make the most of the disruptive technologies.
After attending Fearless in Fintech this past week, we are excited to see how technology will change the financial industry, and how the financial industry will inspire new technologies. If the fintech industry continues to put the customer first, there’s no limit to what we can do to make finances more accessible and to create a better customer experience.
What do you think about the fintech industry and navigating technological disruption? We’d love to hear from you. Drop us a line and let’s talk. We love knowing what the ScaleFactor community is up to. And as always, for everything else, check out the ScaleFactor blog.