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5 Learnings From Working With FinTech Start-Ups and Co-Creators

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5 Learnings From Working With FinTech Start-Ups and Co-Creators

Another day talking culture, leadership and change for digital, and a fascinating review of the five things banks mess up when considering partnering. This presentation was from the Chief Digital Officer (CDO) of a major European bank.

The presentation was titled How not to screw up my next partnership – 5 lessons we learned, and it hit a nerve with both me and the audience, who were all nodding in agreement. Well, at least the bankers in the audience were. So, here are the five learnings from being on the job working with FinTech start-ups and co-creators.

1) We don’t have a monopoly of good ideas

Whenever a new tech comes around, the bank thinks they have to do it. They see Alexa working and go, “Wow, yes, that is good. Let’s build one.” Urmm, but Amazon has built a very good one with APIs. You don’t need to build it, do you? “Yes, we do, because it has to be secure”. But Amazon is pretty secure. “Ah, but we cannot give them our data. We need to keep the data.” Urm, not under PSD2 you don’t. And so it goes on. Banks see a lot of good ideas around the world but are 100% convinced that they have to do it themselves, as no one else could do it as well or as securely as they can.

2) GAFA can iterate really quickly

Google, Amazon, Facebook and Apple (GAFA) and their Chinese counterparts BAT (Baidu, Alibaba, Tencent) are fast, nimble, agile and quick. They have a fantastically microservices structures LEAN organisation that jump at the request of anyone. Not a bank. The CDO recounted the story of a corporate client that processes billions of dollars with the bank and the CEO demanding that he had an iPad app that could sign-off a $10 billion loan in a week of their meeting. Urmmm, a multibillion dollar corporate loan app in a week? You must be joking. Sure, GAFA and BAT can do that, but a bank? So, they fudged it, and built a fast app that was specific to that particular corporate’s CEO and CFO’s sign-off structure. Banks must be nimble if they are to keep up with their customers expectations, and corporate customers are as, if not more, demanding than retail customers.

3) Quick decisions matter

This one reminded me of the comment of the CEO of ePassi who partner with Alipay in Finland. He said that they talked with Alipay in April, signed the contract in June and were live by October, “about the same time it takes to get a meeting with an SVP or CxO of a bank”. Banks are slow to decide anything but, as the CDO pointed out, most corporates are too. Everyone has a voice and a black ball, so anyone can sink an idea before its even started. That cultural barrier has to be broken down if banks are to become more agile, like FinTechs.

4) We should definitely do that

I loved this one. Whenever the CDO was showing the management team anything new and interesting, like telling Alexa to shift money from their deposit to their savings account as a concept, the team would say we should definitely do that. The question then was who should definitely do that? and the team would get this vacant, glazed over look. Who is responsible to do this then? Ah, not me, would be the refrain. Even if demonstrating something with a clear owner, like using AI to determine credit risk, the CRO and SVP of Lending would look over the head of the presentation team and say we should definitely do that, and then point at each other. Hilarious.

5) We have to get out from behind our desks

Again, a brilliant point. Most bankers are comfortable staying within their comfort zone, behind the desk. They can watch and control everything … and do nothing. When ideas come along, they want those ideas brought to them, in their office, rather going out and seeking them out. Changing the cultural mindset to be hungry for ideas, rather than waiting to be fed them, is a key part of getting change to work. So true!

Related: Do Customers Really Want Invisible Banking?

This brutal honesty about a traditional banks’ culture is what is needed for change. You cannot break the old way of doing things without banging a few heads together and ruffling feathers. In fact, my favourite quote about change of all time is:

“If you’re flying over the target and getting no flak, then you’re flying over the wrong place”

You have to break the shackles of the past to affect change and, if you’re not getting objectionists standing up and calling you names, then you’re not affecting change. Take note.

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