2018 was a year of significant developments for fintech worldwide with new players on the scene, major fundraising rounds and exciting new technological innovations from biometrics to virtual assistants.
2019 looks to be even more exciting, but with the pace of digital disruption growing ever faster, it’s important that fintechs don’t lose sight of their purpose and make firm commitments to responsible activity and continued growth in many cases. This can be achieved learning from their past mistakes. Keeping this in mind, here are our 5 new year’s resolutions for fintech companies.
1. Don’t just challenge, collaborate
The adjectives used to describe fintechs, such as disruptors, challengers, upstarts can often sound misleading, assuming that incumbents and start-ups can’t collaborate. And too often a false distinction is made between traditional banks and the emerging digital lenders. In 2019 and beyond, it will be increasingly important for challengers and traditional financial institutions to work together.
Traditional banks face an existential challenge in adapting with enough speed to keep up with the digital revolution and fintechs are well placed to help them overcome these difficulties. Meanwhile, they offer younger businesses a pool of experience to make informed decisions, and can be valuable collaborative partners for new start-ups who don’t have the strategic resources or deep pockets to support the next stage of growth.
2. Prioritise data security
Both traditional banks and the new kids on the block have faced problems in recent years with the vulnerability in digital infrastructure and data security. For the industry, it is of critical importance that both established and startup-up lenders keep the trust of the customers by prioritising data security as the key strategic topic on their agenda. If one or another fails, it can bring the whole industry down.
Fintechs should therefore prioritise data security above all, and make sure their systems are resilient against cyber threats. They should also make sure their securtech match up to the latest advances, so that the to ensure the consumer experience exceed expectations; and more people can effortlessly benefit from the digital revolution in finance.
Chief Product Officer, IPF Digital
3. Advocate for financial inclusion
With the advance of mobile banking, more people are able to participate in the global financial ecosystem, whether they are served by traditional banks or challenger fintech companies. There are still huge untapped markets, particularly in less economically developed markets, which old-school financial institutions are too conservative or too sluggish to want to approach.
Fintech challengers have the means and the willpower to access these potentially lucrative and underserved markets. Digital lenders must take a stand for equality and inclusion, abiding by ethical corporate governance and lending models as they welcome more and more people to the global financial system.
4. Celebrate your workforce
Innovation should never be taken for granted, and it is important that challengers are focused on their workforce. Recruiting the best, maintaining a constructive and safe environment where new ideas are rewarded, and a healthy balance of work and play is valued, and always striving for a more diverse workforce should be a top priority for any fintech.
It is only when challengers have this attitude they can succeed. Valuing diversity of thought and approach allows them to distinguish themselves from traditional banks, drives the innovation which is the lifeblood of any disruptor, and supports the inclusion which should be the aim of those fintechs reaching out to untapped markets.
5. Keep on being fearless
Fintech companies, including consumer lenders have a reputation for being at the forefront of change in the financial industry, and they should endeavour to maintain this attitude in 2019. When faced with new technology like biometric identification for mobile banking, or AI-driven home loans and spending plans, there may be a temptation for digital disruptors to shy away from the next leap forward in tech.
Fintechs should resist this temptation. They should seize every new technology with both hands. Either the tech will be a success for the business, and the company will go from strength to strength, or it won’t, in which case valuable lessons will be learned and the company will be strengthened from its experience.