Everyone’s talking about Fintechs – but what does ‘Fintech’ really mean? It’s a generic term that loosely groups a number of innovative technical organisations within Financial Services.
As the Fintech director for Sopra Steria, I believe I know all about Fintech. To me, Fintech is all about change – introducing new, fresh ideas and ways of working – and making them happen. I’ve worked in financial services across the UK, Europe and further afield for many years – and organisations of all sizes find it hard to change; the bigger the organisation – the greater the challenge. Change means that organisations have to think and act differently to introduce brand new ways of working to deliver desirable services to their customers. The customer really is king and new products and services need to be built to their wishes (rather than the ‘old fashioned’ way of creating a product and selling it hard). What’s more, new, faster technology and access to huge amounts of data have made this issue more acute as it’s raised customer expectations. Put simply – there’s so much to think about and to do to get ahead and stay ahead.
Organisations need to keep up with the very latest ideas – and still deliver a reliable and robust service. And it’s a fact that incorporating new technology is how they will do it. So why is it so challenging for Fintechs and big players to work together? All too often, Fintechs struggle to get their ideas to the right decision makers – and established businesses are nervous of too much change.
The biggest hurdles are often company politics, internal structures, old processes and course – the difficulty of incorporating brand new ideas into ‘old’ systems. For Fintech’s, it’s tricky to get the right contacts at the right level – and to also ensure their ideas are brought to life safely and securely. For banks and insurers, introducing new, untried and tested ideas is hugely risky and it can take a long time – as well as effort and money to get it right.
What’s needed is a bridge between the Fintechs and the more traditional organisations – to help them to work productively together. Organisations like Sopra Steria have platforms that are at the heart of many of today’s large businesses – and they also understand existing processes, procurement and politics which often stand in the way of getting things done. By working together, Fintechs, established players and platform organisations can listen to and learn from each other, in order to fast track innovation and get the results they need – quickly and cost effectively.
So, my advice to banks and insurance companies as well as the Fintechs is to work and collaborate with a platform provider from the start. Fintechs can safely test and prove their worth in ‘virtual factories’ using real systems and data – and financial organisations can be confident about bringing the best and brightest ideas to market without huge risk. It puts new Fintechs in touch with established players – and accelerates change. And that’s what we all want.
So, maybe, we shouldn’t be using the term ‘fintech’ to refer to just new and upcoming technology companies. After all – aren’t we all Fintechs? Perhaps instead we should be focusing on partnerships and collaborations between new technology companies, established organisations and the role platform players have to accelerate change.
It really is true. It’s not what you know but who you know that makes all the difference.
Authored by Colin Carmichael, UK Fintech Director