- Create an environment where it's 'safe to fail'
- Accept that things won't always be right first time
- Continuously and quickly gather and adapt to customer feedback
- Be fearless
Earlier this year, UK challenger bank Starling opened its API up to third-party developers in a hackathon at Google’s London Campus. Its aim was to build innovative and customer-centric services that would sit on top of their banking platform. Greg Hawkins, Starling’s CTO, called it an ‘immense’ success where people were ‘throwing ideas around’ and implementing the stuff they hadn’t had time to do themselves. Genius!
Not just for challengers and start ups
If you thought this sort of thing was just for challengers and hot new start-ups, think again. Last year Barclays ran the largest ever hackathon in financial services as part of a drive to identify new and innovative products for the banking industry – something it said helped ‘fuel and accelerate innovation to benefit customers across the globe.’
"It's about stimulating thinking to deal with the problems of regulation commonly faced by the financial services sector."
Breaking down barriers
Even the regulators are getting in on the action. You will have heard about the ‘sandbox’ initiatives that many of the world’s regulators are using to give financial services providers a safe environment to try out and test new innovations. Now they’re upping the ante in an attempt to reduce red tape and push innovation even further. Towards the end of last year, the Canadian regulator OSC hosted ‘RegHackTo’, Canada’s first hackathon by a securities regulator. Similarly, in the UK, the FCA held its second TechSprint event all about ‘unlocking regulatory compliance.’
The Australian Regulator, ASIC, will be hosting a ‘problem-solving event’ this month to ‘stimulate thinking and approaches to deal with the problems of regulation commonly faced by the financial services sector.’ It has also entered into a cross-border deal with the Hong Kong Securities and Future Commission to collaborate on fintech – something that will create a better framework for financial innovation in each economy.
Creating competitive advantage
What we’re seeing is financial services thinking and acting more like technology companies; and it’s a great thing. You don’t have to look too far to see what’s driving this change in sentiment.
Our 2017 research paper ‘The Death of Legacy?’ revealed that 60% of asset management firms have technology represented at board level. In that same report, all (100%) of the COOs and CTOs interviewed said that technology is critical in giving them competitive advantage. Compare that to just three years ago when less than half (42%) said it did and you can see how far the industry has come in a short space of time.
"100% of COO's and CTO's say technology is critical in giving them competitive advantage."
Innovation now a priority alongside regulation
As technology continues to transform the way financial services are delivered, the industry’s participants, including the regulators, all need a better understanding of how technology innovations can help them modernise. It means innovation is at the top of everyone’s agenda, right up there with keeping up with regulation. Little wonder then that bringing in innovative technologies is now a priority for one in four COOs and CTOs (23%).
Safe to fail
Fintechs are continuously innovating. How are they able to do this? They create an environment where it’s ‘safe to fail’. It’s something that’s central to an innovation culture and is about having the ability and freedom to experience and accept that things won't always be right first time.
The people and teams that work to deliver solutions and services to your customers need to operate in an environment where they are encouraged to try, validate and re-try fearlessly. It takes great leadership and a change in traditional management and planning techniques, but once you do, you’ll be thinking and acting like a true fintech.
"Creating an environment where it is safe to fail is central to an innovation culture."
Don’t stifle innovation
Barely a day goes by without a funky fintech popping up on the market with an enticing proposition designed for today’s digital lifestyle. But rather than looking on enviously, if you want to compete, you need to start thinking and behaving like them. And you absolutely can. It’s about being able to create that synergy between innovation and service offering. Technology has a big part to play, as does the right mind-set. Don’t let yours hold you back.
Want to start thinking and acting like a fintech? Check out my blog '7 ways to make your hackathon a success.'
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