While finance gurus
argue about how it is correct: “FinTech or TechFin?”, new technologies are
actively and at all levels changing the financial services market. Regardless
of whether the focus of the company’s strategy is on high technology or on
finance, there are general management principles in this area.
When building a strategy for a FinTech brand, two things
need to be considered. First of all, companies that provide financial services
online have come to the market for a long time. This segment is quite young and
growing rapidly, but in the future it will only expand. That is why it is
important to create a solid foundation with a long-term plan. Secondly,
customer expectations are changing as fast as technology. Feature that today is
your competitive advantage, tomorrow is just an ordinary requirement. The
pursuit of meeting the needs of consumers may lead to the emergence of new
goals, but it is important to plan innovations taking into account the main
strategy, and not just go with the flow.
Understanding these key aspects should be at the heart of a company’s strategy. The company’s management should not only be aware of the potential of new technologies but also be ready to adapt to an environment that is changing rapidly. Yes, it is not easy, but there are also pluses: since the majority of fintech companies are still in the startup stage, there is an opportunity to build a more focused, customer-oriented and data-based master plan.
The development of any strategy is based on three main
Analyze the current situation: it is important to correctly assess your starting positions, identify potential and weaknesses. Data analysis, understanding of the target audience will help to present a product to your customers that fulfill their expectations.
Changes need to be planned in advance: monitoring of market and technology trends is the must. It is important to see new opportunities in time and adjust your operating model.
The vision of prospects: despite the constant changes in the market, you need a long-term plan, to understand where you want to be in a year, three years, or in five years.
In general, your tactic should include not only gradual evolutionary changes but also significant leaps, that relate to your long-term plans. No need to do everything at once, it is enough to stick to the priorities that have been correctly set.
Do not forget that the success of a strategy depends on the
team – your project is only as good as the people who implement it. Therefore,
think over the system of motivation and involvement of the team in business
processes. It is necessary to provide people with opportunities for internal
mobility in order to increase professional and personal growth.
Focus on customer
Today’s client is the basis of any business strategy in the field of financial services. If the company has satisfied clients, this is a pledge of high profitability. The main advantage of digital technologies in the field of finance is the possibility of a more personalized approach to customers and this should be used to full extent. Any product based on consumer behavior will always have a better chance than cool ideas that do not take into account peoples habits.
When creating a client-oriented business strategy, it is also important to understand that trust is one of the key factors in the financial services industry. The process of creating a reputation and gaining trust is not quick. However, by understanding the client’s needs and offering solutions that make their lives easier, you will succeed.
When such giants as Amazon, Apple, Google, and Facebook enter the financial services market, all that can be opposed is a desire to creating a better customer experience, reduce costs, using new digital solutions and improve the quality of service. The strategies of Fintech companies may differ significantly from each other, but the end goal is the same – improving the quality of life of people. That is why it is better not to spend all your efforts on competition, but to strive for mutually beneficial cooperation with other participants of this ecosystem.
One of the most effective strategies in the fintech area is a partnership with financial institutions. When the focus shifts from competition to solving consumer problems, there is a greater chance of success. Especially for the small players who do not have sufficient resources to invest in innovations to improve their services.
During the coming decades, we will witness significant changes in the digital infrastructure of financial services. Big data, AI, cloud computing and even augmented reality will change the market and business models. Fintech leaders should become a catalyst for these changes and put future innovations in their plans today. When working on this, it is important to ask yourself not only questions: “what?” and “how?”, but also “why?”. Only in this way can you identify new revenue streams and find effective solutions to business problems. Companies that can manage innovation as a continuous process will not only survive the market transformation but also succeed.