Innovation: A matter of collaboration
Written by Kevin Johnson, Head of Innotribe Innovation Programmes, SWIFT
Individuals have light bulb moments the whole time, but what makes the idea a reality is collaboration. This is how some of the greatest inventions of the last century have come to fruition. At the moment, the financial services industry is undergoing a rapid evolution, and FinTech companies are being established left, right and centre. SWIFT’s Head of Innotribe Innovation Programmes, Kevin Johnson, is at the epicentre of this evolution, and gives a unique insight into what supports FinTech innovation, and what practices are best to avoid.
Over seven years ago, the concept of FinTech did not exist in the same way it does today. The concept of startups collaborating, or competing against each other, was just kicking off. Neither cloud computing nor mobile technology was mainstream, nor was the word ‘blockchain’ being widely used.
The history of FinTech can be described in two parts:
1. FinTech 1.0 was mainly categorised by venture capital money aimed at disrupting what was seen as an inefficient, though lucrative, financial services market.
2. More recently we have been experiencing FinTech 2.0 which features more of a collaborative mindset, focusing on how FinTech startups can help the industry as opposed to replace the industry. The financial industry itself has played a large part in this development because it is now providing the majority of funding.
This change in mindset, and to FinTech 2.0, was crucial. FinTechs and established financial institutions need to foster closer collaborative relationships, and understand the importance of creating a win-win environment. This is why Innotribe launched the programme in 2009 – to bring the two worlds closer together and help the industry to understand and take advantage of these new technologies.
Collaboration is also even more important within the financial industry, due to the legacy systems involved. FinTechs cannot simply jump to the next level in the same way as startups can in other industries, as they face a number of hurdles such as scalability, regulation, standards and governance. This is why collaboration between businesses is key, as financial institutions can help FinTechs to overcome these hurdles and take their ideas to the next level.
Innovation: what works
The key to delivering a sustainable business and sustainable innovation is to solve real-world problems. By understanding why you are doing what you are doing, you will be able to clearly articulate this to others. Experience has shown that you only have the first 11 seconds during a presentation to grab your audience’s interest and prevent them from becoming distracted by their phone. Without this clarity you will not be able to connect with your audience.
Before presenting, you need to understand who you want to connect to in the audience. This will influence how you explain your proposal, and if only ten people put down their phones, and listen to your pitch, and come to meet you in person, you can consider it a successful presentation – as these ten people were your customers in that audience, and you connected with them. If a lot of people come up and say great presentation but do not engage with you, this means you did not understand your customers.
What also really works is humility; this is from both the startups and the more traditional institutions. Banks can learn from startups, just as startups can learn from banks through mentoring programmes, co-creative and collaborative workshops. The other critical element is the make-up of the team. If you get the wrong people in at the early stage of development, it could very well kill the idea.
Finally, for every presentation you need to remember to conclude with an ‘ask’: what do you want to get out of the process, why did the person listening to you give up their time, and what do you want them to do afterwards? With a clear call to action you can ensure you get value out of the presentation.
This is where FinTech 2.0 is so important; there are some great people out there doing some great things, and the teams that are successful are those who nurture the people who can best foster the relationships that really count.
There are a lot of financial institutions and FinTech companies that are stuck in first gear when it comes to innovation. If established financial institutions want to innovate, and FinTechs want to take their ideas to the next level, they will have to foster closer collaborative relationships, and understand the importance of creating a win-win relationship that benefits the entire industry and creates the financial world of tomorrow.