As consumer needs and expectations continue to evolve, innovation has become synonymous with survival. The ability to deliver products and services that customers want, and in the way they want, whether it be through convenience or speed, has created the opportunity for companies such as Amazon, Alibaba, and Google, to become competitors beyond their native industries. In fact, it is removing the lines between market segments, where Telco’s are becoming Banks or Health Companies, Retailers are becoming Banks, or Grocers are becoming Data companies. With the growing threat of tech giants and other entrants, incumbents have begun to turn to their Chief Innovation Officers (CINO) for ways to remain competitive, relevant and successful. The growing strength of the FinTech market presents a unique opportunity for any company interested in innovation. Why? Because the use of our mobile and IoT devices is becoming table stakes, and just about everything we do requires an exchange of value whether it is money or something else. FinTechs who are built with agile technology and who are based on disruptive business models can help to enable the transformation that incumbents need to survive, and in a much more agile way than an incumbent “titanic” can turn their ship. But what exactly should a CINO know about FinTechs?
The 5 Things a CINO should know about FinTechs
The FinTech Ecosystem
The FinTech ecosystem is a unique opportunity for any organization that is interested in innovation. As there are 1,200+ FinTech start-ups within the Canadian landscape alone, a CINO should begin with what is the Customer Job to Be Done, what pains or gains does the customer have or seek, and then how can a FinTech’s product help create the needed new value in a way that is viable for their organization. However an organization envisions its transformation, the FinTech landscape is very diverse in regards to both the types of FinTechs as well as their solutions. By bringing incumbents and the ecosystem together through partnerships, a CINO can quickly deliver products and services that create true value for their customers. Engaging in genuine partnerships can also help to make an impact beyond a CINO’s organization. Leveraging the FinTech ecosystem can also help to drive the economy and increase competition (link to our blog post). The Amazon of banking – where my bank is a platform I trust and depend on, lets me buy products I choose, with the experience that is best for me. Imagine in the future where FinTechs are the products, and the banks are Amazon.
There is Power in Data
Detailed research and strategic insights are at the heart of fueling meaningful innovation. Today, a CINO needs to assess what their organization is missing and what they need, in order for their innovation process to have a strong foundation. The ability for a CINO to have a deep understanding of trends, what their competitors are doing, as well as the new technology available, is an essential first step to successful innovation. Throughout the innovation process, insights from data can continue to be a powerful tool in helping the organization understand what works and what does not work. Helping the organization fail fast, and win faster.
The Customer-Centric Approach
Understanding the customer and their behavior is a critical factor in successful innovation. By including the customer throughout the innovation process, by considering their needs and pains and the job they are trying to do, a CINO can significantly mitigate risk. By filtering innovation ideas by asking whether or not this product or service is meeting a need of the customer and is aligned to the company’s strategy, can help to save an organization time, resources, and money. As a CINO moves forward with an innovation initiative, it is critical that the idea is constantly tested and validated by their customers. Through constant testing and validation, an organization can be reassured of the potential success of the product or service once it moves into the commercialization phase. One of the reasons that FinTechs have been able to differentiate themselves, has been through their ability to create a product understanding the job a customer is trying to do. Wave, for instance, is a FinTech that recognized the need for Canadian small businesses to have resources to better manage their finances and plan for their financial future. A job that a segment of their target customer base may be trying to do is track their income and expenses. Just like how a customer at a bank isn’t buying a mortgage, they are buying a home. By offering personalized solutions for bookkeeping, invoicing, and payroll, Wave has helped to provide small businesses in Canada with the support and resources to achieve their financial goals.
The Start-Up Mentality
Unlike start-ups, incumbents face a number of barriers to success throughout their innovation process. Whether the organization has a culture of being risk-averse, or if there is a limited number of resources available to the CINO and their team, the success of an innovation initiative can suffer as a result. Yet, in order to be successful, a CINO needs to adopt a start-up mentality; where taking risks can mean failing fast, but can also mean winning big with their customers. A start-up mentality can also mean thinking about what customers want, and how an organization can either create it or deliver the solution in a new way. Start-ups don’t know the answers, and the successful ones are passionate about the problem they want to solve, not the solution. The startup founders to “bet on” are the ones who don’t build a product first but rather start with customer jobs, pains, and gains.
The Canadian Perspective
As a CINO begins to examine potential innovation partners, there are a number of factors that they should consider before making their decision. Within the Canadian FinTech ecosystem, there are 1,200+ start-ups that are creating and delivering disruptive and innovative solutions to Canadians directly and indirectly. With a deep understanding of the Canadian landscape, incumbents will find hundreds of FinTechs that can help to accelerate their innovation initiatives. Not sure where to look and how to start? FGS’s Canadian FinTech Database is tailored to help stakeholders such as Incumbents tap into real-time data that can help fuel their innovation goals. By providing market intelligence, insights, and analysis on FinTech, our FinTech experts can help CINO’s accelerate their innovation process.
As a frictionless experience consisting of convenience and speed become more of a requirement for consumers, the need for incumbents to innovate will increase. The FinTech ecosystem, specifically within the Canadian context, is a growing opportunity for a CINO of any organization interested in transforming their business. By choosing to include both FinTechs and the customer within their innovation process, CINO’s can enable true value for both their organization and their customers.
To learn more about how we help innovators succeed, check out our podcast The Disrupticons where we share stories with innovators and why it matters.