I marvel at the brilliance and passion of inventors. Today’s FinTech pioneers have that stuff and challenge convention with ideas that shame our legacy systems. These geniuses cannot understand why clunky incumbent “tech” persists when better ideas are here for the taking.

And yet most of the inventions never get commercial traction. Demos aplenty and lots of “great meetings” raise hopes that slowly drain away. A sort of “innovation expiration” sets in as the effort loses momentum – and funding – and the innovators retreat to ponder their next move.

Don’t Leave – We NEED You!

We just don’t know it most of the time.

I’ve seen five different causes of the disconnect between much needed innovation and actual success. They are all related and therefore can be either be the spark of rejection or the nail in the coffin of failure.

Numbers – Houston, We Have a Proliferation Problem

@MichaelKitces and team are just brilliant. One of their first great works was the now widely known FinTech Industry placemat of capabilities – all on one page. Innovation has forced some font size shrinkage but that single sheet still captures the landscape. And what a roster it is:

  • 186 capabilities in 29 categories
  • 24 portfolio reporting applications
  • 14 financial planning packages

Daunting.

By comparison, there are a lot of stocks and many more bonds but their world is simplified into S&P’s 11 sectors and the bond world’s 14.

Consumer products are more disciplined – consider the five categories of toothpaste. Even cars sport only 12 categories according to JD Power (though mechanics claim 20 – innovators are everywhere).

I know some CIOs at big companies. They cannot begin to understand the number of offerings. But most also fail to investigate. Do they have active efforts going to find new ideas? More on that in a minute.

Priorities – If Everything is Important, Nothing’s Important

A recent report from a top consulting firm outlines the top most important trends in tech for 2022: 14!

I’ve been in a lot of strategic planning sessions over the years and I’ve not yet seen or given a presentation about 14 trends. And I’ve never seen any successful corporate plan with so many objectives. I know that’s not the point of the work but who and how and where do executive teams find their target?

Corporate focus is a process – it has to have an objective easily conveyed to the full team but also must emerge from the company’s capabilities and values and existing foundation of success. A true company success is a build – not of an entirely new house on raw land but rather improvements to an existing structure.

Don’t view that foundation as a constraint, view it as the solid base on which to grow. Call that a Kodak moment – since Kodak had it and lost it.

Breaking Through – The Pursuit of Acceptance

Another top consulting executive was asked recently about InsurTech and brilliantly observed that most die on the runway having spent most of their venture backing on buying awareness they hope will translate into acceptance. He laments the spend of up to 80% on promotional web search. “The only people making money on that innovation are Facebook and Google”. Wow.

He went on to say the industry needs to work harder to identify emerging technologies and the entrepreneurs behind those innovations. Allianz is one of the firms that has stepped up – creating their Onramp Insurance Accelerator with Securian as well as making investments in capabilities such as LifeYield.

ROI – Why Should I Buy?

This one is on the FinTech firms. Without a clear connection to the buying firm’s bottom line, I cannot imagine any real company writing a real check. And I’ve sat in that chair.

A burden carried by many (most?) FinTechies is that they are unapologetically Techies. But the buyers are business people too often of a totally different background, orientation and personal motivation. One of the most entertaining moments in corporate life is gathering the senior team with a FinTech innovator team and watching the awkward proceedings. Nothing in common – even the lunch selections can be odd as they reinforce the differences.

Integration – Don’t Be an Island, Join an EcoSystem

No company is buying any application for an open hole. There is something there already and it is connected to a bunch of other stuff. None of it might be good. Some of it could be – but you don’t know. And you don’t know what they know or think. Connectivity is all that matters and the ability to connect is as important as the capability. Don’t be the only grounded three prong plug in a workshop full of two prong outlets.

How do you connect??

Adoption – A Problem of Design

My favorite for last. This element is owned jointly by buyer and seller of FinTech capabilities.

First we pick on the seller – did you design your product to be excellent or to intuitively and naturally solve a problem? The sale of “better” is a lot more difficult than “easier”. Most adoption of everything is a function of greater ease along with improved results – so adoption is a function of the DESIGN. The owner’s manual is history – don’t force it on an already busy FinServ.

But don’t walk away Buyer. How many enterprise software purchases have failed to attach a full budget for training and integration?? “We can figure it out and save…” is one of the most devious enemies of corporate success. A race car in the hands of a driver who can’t drive is a …. stupid waste of money. But you get to say you own one….I guess…. IT procurement checks a box and gets to blame the business for failure to drive.

So with admonitions to all sides of the FinTech movement – let’s all just get along and start working together. The upside is worth the effort.

Give me call – we can help.