Get off our patch – no room for fintech fakery
A search for fintech now returns nearly ten million results – astounding, when you consider the first searches were recorded in 2005. But how many of those results focus on, or indeed are sourced from fintech innovators in the truest sense of the word, asks Philippe Gelis, CEO and co-founder Kantox.
The reality is that fintech is a phenomenon – a buzzword. And everyone, even the lumbering technology and financial giants want to be a part of it.
Who is muscling in on the fintech phenomenon?
- Banks: On the one side we have traditional banks. Less than five years ago, they laughed at fintech players – we were a minor nuisance to them – incapable of impacting their bottom line. However, this has shifted in recent years. Banks have started to realise the true value of fintech and they want to be a part of it.
There are some banks taking genuine strides to improve the fintech landscape by collaborating and partnering with fintech companies, such as BBVA acquiring Holvi, Simple and also a stake in Atom Bank. But with every smart bank, comes a “cosmetic bank” – one that is showing fintech support on the surface, purely to be perceived as innovative by customers and drive favourable headlines. These banks run schemes such as hackathons and accelerator programmes. While this is a show of support, it means little in practical terms for the fintech industry.
- IT providers: In a similar vein, we are now seeing traditional IT giants jumping on the fintech bandwagon. These are merely software companies with banks as clients. They’ve been on the scene for as long as the banks and in many ways are even less disruptive and visionary in their approach.
Why the sudden interest in being a fintech company?
- Profile raising: Visibility is a key element. With ten million Google search results for the term, it’s clear there are a lot of interested readers. The “finfakes” want some of these column inches and have realised that aligning with fintech is a more successful strategy than singing the same old tune of years gone by.
- Attracting millennials: Unsurprisingly, old school back end technology systems and inflexible high street banks don’t appeal to the younger generation, who are used to managing their daily admin through their smartphones. By claiming to be FinTech innovators, core B2B technology platforms appeal to traditional banks, who in turn want to appeal to their digital savvy end-customers.
- Raising capital: Fintech is hot property right now and comes with a hefty price tag. Jumping on the fintech wave can be seen as sure-fire way to gain the attention of investors and bump up market value.
- Attracting talent: One of the toughest hurdles of operating a fintech company – or indeed any tech company in the current market – is finding and attracting the best talent. Truly cutting edge digitally skilled workers are in limited supply and competition is steep. Alongside sustainable salaries, these workers want an exciting role that keeps their creative minds stimulated and offers constant challenges and opportunities. Old school tech corporations are wise to this demand. Positioning themselves as fintech players makes them far more appealing to smart candidates.
Are real fintech players under threat from the finfakes?
With fintech generating £6.6 billion in revenue last year in the UK alone, it’s hardly surprising incumbents want to be a part of it. However, marketing yourself as a fintech player is the easy part. In the short term, this may be a successful tactic for core tech providers to appeal to high street banks, who in turn want to draw in customers. Ultimately however, these enterprises will need to walk the walk, not just talk the talk.
If the end-customer experience doesn’t match up to the high-tech brand image, it won’t be long before the lie is exposed. If tech corporations and traditional banks want to be true players in the fintech industry, they need to bring real value to the market. Demonstrating how they are truly working with and embracing disruptive fintech enterprises with meaningful partnerships and collaborations will be a far more successful long-term strategy than simply adding to the Google search traffic.