Is digital disruption disrupting your customers?

Are you being disruptive enough in your digital transformation journey? Within the industry most organisations are at different stages of digital evolution but how do you ensure you are being disruptive enough to make a material difference to customer satisfaction and forward thinking enough to remain competitive? And for those that consider themselves to be disruptive, have they maintained a healthy balance between disruption and innovation alongside the crucial elements of communication and education to avoid leaving customers behind?

With the industry changing at such a pace, this really is a new world of banking. And this new world of banking requires a new way of thinking – so who better to take inspiration from than the true newcomers on the block - the FinTechs?

Harnessing FinTech innovation

Agility and innovation are at the very core of a FinTech’s existence, as they lead the way with next-gen services and demonstrate the realms of possibility within a more flexible operating model.  For financial institutions who are weighed down by layer upon layer of legacy IT, it’s quite often simply impossible to move as quickly to deliver new services to market at the same speed. However instead of it being a race to beat the Fintechs to market, we’re seeing more and more financial institutions take another approach - collaboration.

According to a PwC report, financial institutions are embracing the disruptive nature of FinTech services through partnerships and investing in enabling technologies to plug service gaps and efficiently bring new products to market. The report found almost a third (31%) of financial institutions have enlisted the services of FinTech companies, compared to 22% the previous year[1], highlighting a clear understanding of the need to collaborate to meet growing customer expectations. 82% of financial institutions also expect FinTech partnerships to increase further. These partnerships have encouraged greater innovation within financial institutions, with 77% increasing internal innovation efforts and 56% putting disruption at the heart of their strategy.

Nurturing FinTech’s potential

FinTech innovation hubs have appeared across the globe, to nurture upcoming start-ups and build connections within the industry. A prime example of this is Accenture’s Fintech Innovation Lab which hosts an annual Impact Lab in London, Hong Kong and New York. The purpose of this is for FinTechs to pitch and exhibit offerings to financial service executives, followed by several weekly workshops and mentoring sessions, and completed with a demo day to showcase cutting edge FinTechs to decision makers, investors and the media. However, it doesn’t stop there. The lab’s alumni continue to provide the framework for FinTechs to promote their growth.

Hubs such as this provide the ideal environment for mutual collaboration. Not only do financial institutions stand to gain fresh, agile and innovative ideas through partnering with FinTechs, but the FinTechs themselves also stand to gain years’ worth of knowledge, expertise and insights into the world of financial giants that they simply don’t have.

More FinTech than feelings?

As levels of innovation race beyond what might have seemed unthinkable only a few years ago, it is easy to become so focused on digital transformation that we forget the most important element of all - people. Undoubtedly an evolution of services is required within the industry and collaborations with FinTechs can facilitate huge steps forward on the path of transformation; but ultimately innovation is only truly effective with successful adoption. Therefore taking staff and customers with you on the journey is crucial for sustainable success.

Equally as important in the process is listening to your staff and customers at every stage of development to ensure relationships are not simply transactional processes, but value-added connections. Innovative capabilities from FinTech partnerships can also be used to emphasise the ‘human nature’ of the customer experience on offer and use the insights they provide to personalise customer engagements.

To remain competitive in a fast-paced market, financial institutions must harness the power of disruption and demonstrate innovation in action to plug service gaps, boost internal capabilities and become more agile. Data and analytics can assist with making informed decisions and technology can enable your strategic directions – helping you to choose the right collaboration partners to push your vision through to fulfilment. However, whether you are developing innovations in-house or partnering with flexible FinTechs, it is imperative that financial institutions find the right balance between fast-paced disruption and listening to the customer with unfaltering commitment.

[1] https://www.pwc.com/gx/en/industries/financial-services/assets/pwc-fintech-exec-summary-2017.pdf