by Rajesh Kandaswamy | December 7, 2015 | Comments Off on Myths About Fintech – Part 2
In my previous post, Myths About Fintech – Part 1, I listed a couple of issues that can result from how one views Fintech. In this post and a later one, I will point to problems caused by how companies address Fintech. These do not imply that you need to throw away your approaches, just that you have to guard against lapses in planning that can occur due to myths about Fintech and how emerging technologies need to be addressed.
The Isolation Approach To Fintech
Since Fintech is new and everyone still has their day job, many organizations assign the responsibility for Fintech to a group or an individual. An implicit assumption is that Fintech is a cohesive group of companies, ideas and processes that can be tackled similarly and together. Such a group starts with a loose mandate since there is acknowledgement that Fintech cannot be treated as a mature business yet and an early task for such a group is to define its own destiny. This is a good step, but an incomplete one. Fintech’s potential spans many business areas, and in different ways. An isolated group cannot be experts in all of them and while they can lean on others, say for a particular area such as lending, it does create a distance and a delay that can result in weaker strategies or an incomplete set of options. Moreover, anointment of someone to be in charge of all Fintech can lead to others turning their gaze away from Fintech, the ones who might have the best understanding on the implications on Fintech on their business area. Unless this is addressed, their voices might not be heard, even when they speak up. As organizations sprout Fintech groups they have to be careful invite all to contribute, not only inform them.
Recently, I met with the leaders of one of the largest consulting companies in financial services and we discussed Fintech a lot. They have acknowledged the growth in Fintech and have addressed this with such a group. Over a year ago, when I asked their approach towards Fintech, they said that any business they got was incidental, not intentional yet and they might change that. My suggestion was to develop a strategy around Fintech markets. They have since created such a group and it has provided them a mechanism to look at Fintech seriously, channel conversations in the company, prepare their practice teams and also provide quick answers to clients. To their credit, the leader of this group acknowledges that while this central group helps kick start internal efforts, he expects Fintech to be part of everyone’s work soon. He actively encourages everyone to join and does not pretend to know all the answers. Such an approach is vital to getting the most out of Fintech, and this can be different to how organizations typically address new technology, say mobile, where the focus of such an internal group is on developing experts who will be the first and best source for everything related to that area and who are expected to build tools and frameworks that can fit all needs.
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