Fintech - The Success Factors

In today's changing world, for Banks to remain competitive, Banks must commit to transforming themselves into fully-digitalised businesses and must operate like a true technology driven company.  

From our perspective, 10 key aspects that have defined success in Fintech companies that Banks needs to adopt -

1. Customer experience - Fintech companies constantly focus on improving customer experience and learn from every interaction. This is the mantra of success.

2. Digitalization - Create a "stretch vision" for digitalization blue print and make CxO's accountable for it. The "stretch vision" are based on what digital outcomes and it should not be constrained by digital interactions or by current technologies or by as-is scenario. These stretch visions should become inspiration for new innovations.

3. Technology is a key enabler – Fintech's are changing the world through agile platforms and new technologies. Banks must acquire new capabilities and technologies and need to invest in promising technologies. Banks must be willing to take on technology risks and bet on emerging technologies to build new parallel solutions/services - instead of the relying only on traditional ways of relying on "Tested & Proven" solutions.

4. Talent Management - Banks must invest on right talent, if needed on a global scale. Companies have to hire people from other regions/nations & en masse. For example, Indian banks should not shy away from hiring people in Silicon valley. Banks should note that they are hiring digital skills not industry experience. To succeed, hire the right talent and change internal staffing processes to do so – if required.

5. High Performance Culture - Success in new technology development depends on having the right digital talent. Key employees must be protected from "business as usual" attitudes and teams need to be built on high performance attitude. This implies changing existing HR polices,  benefits & operating models etc. For some banks, it makes sense to up a separate business unit that nurtures Fintech initiatives. This unit operates outside the "Traditional Banks" and does not suffer from traditional organizational hierarchies and limitations. in order to increase collaboration, productivity and "mind-shift".

6. Data driven decisions - Banks must shift their mode of operations from process driven to data-driven. Data analytics drives every activity and provides insights to decisions. Data analytics and modelling will have to continually evolve and keep adding to its value proposition. Banks must embrace live testing in Fintech as they adopt agile development and work in "live-beta" environments - in order to increase the pace of innovation and acceptability.

7. Create Eco-System through collaboration - Banks must build collaboration, partnership, and open transactions to succeed. This essentially calls for a big mind-shift as Banks now need to look at the entire ecosystem and collaborate with the best in the world to create a global value chain. New regulations impose these in forms but this a great way to successes and this helps compete/collaborate with startups.

8. Agility with Zero-waste attitude- Banks must learn to manage development projects like a start-ups with complete agile process. Along with agility, zero-waste based budget approach for technology development is key. All expenses must be aligned with the value creation and not based on effort spent.

9. Scalability – Solutions built must be scalable across the organization and value chain. This implies that all new technologies being developed must have scalability built into its core DNA and solutions developed may be able to rapidly scale for success. Startup fintechs today keep scalability as key requirement and don't face downtime issues. Banks need to fast track this process. For example, PayTM was able to scale up by more than 1000% in one month after demonetization in India seamlessly.

10. Challenge Status Quo - Banks must challenge everything. Status quo is not acceptable when dealing with Fintech which impacts all functions, products, business units and locations. Banks must examine & change (as needed) all aspects of the business: embracing both customer-facing and back-office systems and processes and be more innovative.