How can fintechs move forward?

Mastercard this week announced the launch of Accelerate, a new initiative to drive growth at scale for the fast-evolving FinTech industry.

The initiative is designed to support the ambitions of players in the FinTech sector through tailored support arrangements including access to insight, tools, technology and investment to support innovation.

Designed to operate alongside the successful Start Path programme, Accelerate is intended to broaden and deepen Mastercard’s engagement with the payment FinTech community including the next generation of digital banks.

But what do fintechs really require to move forward? I asked Julian Sawyer, COO, Starling Bank, for his take on what fintechs need to survive in a hectic, highly-populated environment.

In what aspects do FinTechs need the most support in reaching their potential and getting to scale?

The need for partners who operate with the same agile mindset and speed to market is key – this challenges many organisations, however this mutual understanding is critical to long-term success. Once there is understanding, then it’s much easier to work in partnership to deliver value for both.

Within a highly regulated sector like finance, there are limits to what flexibility a partnership can bring, of course. But having a partner willing to work towards a shared end goal and work to achieve it, without just saying “but that’s outside what we normally offer” is the type of support we, and other fintech businesses, need. That can be on the technology infrastructure side, the licensing side, product marketing etc.

In your view, what’s the most pertinent financial need, be it b2b or b2c, that FinTechs should be trying to produce solutions for?

In my opinion, there are two key needs that we as an industry need to address:

  • Current accounts that actually deliver a valuable proposition, which puts the customer first, rather than a way for banks to make revenue.
  • Looking to get people who have not had access to banking into the ecosystem, with as simple and un-threatening a product as possible. The financial need here is both b2b and b2c. On the b2b side it’s a lot more efficient not to deal with cash, and on the b2c side the more they work digitally (and responsibly) the more financial products and opportunities open up to them.

Can major banks have any hope of meeting growing consumer needs in the way that FinTechs can?

Some of the biggest banking brands are pushing hard and have developed their digital experiences.

They will always be held back, in some respects, by the weight of their business, shareholder expectations of profit, legacy technology situation and even customer view of their brand. A modern financial customer can be seen as any other – they need trust and choice. Smaller banks can offer both as they can design from the ground up to cater for the requirements.

Some bigger ones can maybe focus on trust as a selling point but possibly just cannot economically offer the choice needed to be all things to all customers. The speed of change and velocity means it will be hard for them to catch up, so perhaps a solution for the bigger banks is to focus more on what they can deliver and achieve that, rather than chasing smaller players in a new arena, where they don’t know the rules of the game.

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