Fintech has dramatically disrupted the financial services industry with four of the most successful fintech companies launched in just five years from 2010 – Revolut, Monzo, Strip and Starling Bank. Why have companies like this continued to succeed and emerge as we head into 2019? The easiest way to find out is to look at what each of them have in common – putting the customer first, perhaps only made possible because they weren’t being held back by legacy technology or processes.
Keeping up with success
Fast forward to today and the fintech industry is already booming, attracting $57.9bn of global investment in the first half of 2018, and new companies launching into market every day. But to ensure that success continues over the coming years, fintechs need to be able to grow and scale at pace in order to support their continually growing customer bases.
But scaling up isn’t an easy process, as many businesses will know. Though putting in place tools and processes which can grow with any company is essential to empowering the organisation to get on with what it’s best at, finding the right approach isn’t always straightforward. At the same time as coping with this huge amount of change, fintech companies need to ensure they maintain business as usual, yielding the same levels of customer satisfaction as always with the fully digitised customer service that they have become synonymous for.
As such, it’s vital that companies meet this period of growth with caution and play it right to ensure success. Scaling up will bring with it a whole host of change and, paired with the constant evolution that comes part and parcel of today’s market, fintech organisations need to be prepared to be flexible enough to adapt to the environment and fast enough to make decisions as quickly as change happens.
The era of planning
The solution to ensuring that businesses are able to cope with and quickly respond to this constant stream of change is all in the planning. Fintechs already benefit from the advantage of flexibility and adaptability due to their highly digitised working practises. But this won’t help unless the same qualities are also reflected in their business planning.
Being relevant now means nothing if you can’t adapt to the changing climate, so companies need to ensure they are planning for the future – not just thinking about the here and now. In a recent survey, Ernst & Young revealed that a third of UK fintech companies believe that they’re likely to IPO in the next five years – a clear demonstration of the rewards that can be reaped from staying successful. But the answer to truly setting the successes apart from the failures is connectivity. A more connected company with a more connected approach to how it plans will be leaps ahead of their competitors.
Connecting the dots
To be able to accurately forecast revenue, costs and liquidity on a regular basis, fintech companies need to first connect the dots – those being the people, processes and data. Doing so will enable them the ability to model and digest significant variations in activity and resources, as well as changes in operating models and growth scenarios.
Keeping the business in silos only holds a company back. To be able to have insights into where money is being spent in order to forecast more accurately, and as such, more valuably, fintechs need to break down these silos and connect the business so they can make more informed decisions and ensure they don’t burn through valuable capital unnecessarily.
Connected planning is also a great strategy to help businesses remain nimble – which is an extremely valuable asset when the future is so unclear. With new regulations being implemented, political fluctuations affecting currency rates, access to skills and trade deals, no one is able to predict what the future holds.
Taking a connected approach to planning allows information to flow more freely across a business, providing a much more holistic view of the entire company that allows visibility into its performance. The data collected can then be used to forecast for years in advance at a time, making the future much more predictable and providing the much-needed agility and insights for adapting and responding to potential unknowns. If changes occur, organisations also have the power to input new variations and quickly run new scenarios to respond in real time, potentially marking a real competitive advantage. Suddenly, fintechs can make critical decisions that before may have seemed too risky, with far greater certainty.
Fintechs have digital on their side, meaning traditional banks are unlikely to ever keep up with their agility – but that doesn’t mean fintech companies shouldn’t always be looking over their shoulder. What traditional banks do have on their side is experience, loyal customer bases and money. As such, taking a connected planning approach to ensure fintechs have a clear view of performance and the ability to react quickly to market changes is key for these companies to cement their place in the future of finance.
Ian Stone, CEO, Vuealta