Written by Rami Cassis
Jerry Young, CEO of Parabellum Investments’ leading fintech portfolio company ieDigital, has written an insightful piece for the FinTech Magazine. He argues that financial services providers “must begin embracing the trend for instant financial convenience”, offering insight into how firms can keep up to date with the rapidly evolving benchmark for digital services.
Young hits the nail on the head when he refers to our “age of convenience”. This is driving innovation throughout every aspect of our lives, from new smart ways to shop at your local supermarket to AI-driven online retail platforms. The age of convenience is also taking over the financial services industry. Not long ago you had to stand in a long queue at a bank with a stack of paperwork to open a current account. Now, you can open an account via an app, from your sofa, within minutes.
Convenience-driven innovation isn’t slowing down – it’s likely building momentum. People are expecting more and more from their financial technology. Whether it’s every day consumers wanting faster and more accessible apps, or businesses looking for easier ways to take out small loans and monitor their employees’ spending on work cards.
But it’s not just about offering more services in one place and providing them at breakneck speed – although these are essentials offerings of a competitive fintech offering. It is also vital to offer smooth, accessible, and intelligent digital services that users can navigate as easily as their bedroom. A smooth digital experience is everything.
The critical importance of digital services to financial service providers is highlighted in recent research by ieDigital, in which they ran an analysis of data from the Building Society Association handbook. The results, as Young points to in his article, show that financial service providers who are less able to create value through digital services perform worse than their more digital-competent competitors. We are without a doubt in the age of digital finance, and businesses that don’t invest in building their digital capabilities will fall behind.
How can financial service providers keep up? Young rightly argues that embracing a digital culture, and rooting the need for digital transformation in a business’ DNA, is central to this innovation. I believe introducing greater professional diversity is one of the best ways firms can drive digital innovation. Many fintech firms are dominated by bankers and accountants but bringing in industry expertise from the tech world, for example, would increase diversity of thought and give firms more of a competitive edge.
Beefing-up HR is another excellent way to create and maintain a culture that strives for continuous digital innovation. HR also offers a solution to smaller firms who, typically without Chief Innovation or Digital Officers, would otherwise be dependent on the CEO for culture change – a barrier to change that Young points to.
Another area where I agree with Young is the need for a keen approach to risk. To drive long-term growth in any business you must take a test-and-learn approach and embrace failure as a necessary step towards finding new and better ways of doing things. A healthy relationship with risk is particularly important for “fast-changing customer experiences such as digital banking”, says Young. This makes an appetite for risk essential for financial service providers today.
This is an exciting time for financial services providers, with rapidly evolving customer demands and technology advancements offering massive growth opportunities. In our age of convenience, providing instant, comprehensive, and smooth digital services must be a prime consideration for all players in the industry. Staying at the forefront of the digital experience revolution depends on financial services firms embracing a digital culture and an appetite for risk.
Jerry Young’s article can be found here.