by Tiburcio Sanz, Head of Fintech Solutions at Railsbank
When we hear about Banking-as-a-Service, we immediately think of agile companies offering nimble solutions and continuously developing tailored user experiences.
One of the reasons for the fintech revolution was to break out from the legacy of traditional banking and remove the rigidity of financial institutions.
However, to achieve a truly nimble service for customers and end users, the well-worn swan analogy comes to mind: even though everything seems calm on the surface, underwater there are several moving parts that execute such an elegant movement.
Nevertheless I have seen first-hand how some fintechs cannot cope with their end users’ demands, because they are not capable of supporting new products and services that continually challenge the status quo.
Fintech users want a borderless experience, to “bank” with companies that understand their needs and integrate every aspect of their financial lives. But end users are rarely aware of the licenses, technological integrations and legal requirements that companies have to deal with. If we look in detail at the several layers of complex structure that fintech companies have to build, we realize how important it is for those companies to stay true to their missions.
To quote Simon Sinek’s Golden Circle, we have to focus on the WHY of the problems that we are trying to solve and the solutions that we are building in the process. The HOW we do it and the WHAT we do can change with time, but we must never lose sight of the WHY.
Take the case of a fintech that is up and running, and its core idea is centred on personal finance and investments. The WHY is that people need better investment alternatives. People need to access investment services in an easy, simple and pragmatic way. The industry has changed and investing should be encouraged to every person regardless of their income. Saving and investing for the future is something that we could all do more of and it should be considered essential.
When we understand that the WHY is the most important factor, we can then focus on the HOW and the WHAT.
So if we think of the HOW, we could say that this firm works with AI and machine learning to better understand the different personas and profiles. It uses big data to provide unique investment options to each user.
Moving on to WHAT, we could simplify it to say that said fintech is simply an investment platform for people that want to improve their capital returns. Helping them with their day-to-day finances, improve their spending and give them access to tailored investment opportunities.
Now the main differentiator that we see in our industry when compared to others, is the constant need to innovate and move forward. The fintech industry was born out of disruption and thrives finding new opportunities and challenges. Every company operating in this industry has to be constantly looking for new ways to service their customers and end users. The challenge is to do so by maintaining a clear alignment with the WHY. The moment companies start chasing the new fad while forgetting their core values, is when the misalignments become evident, and products start to fail.
So, how do we refrain from losing sight of our WHY? As explained by Eric Ries in his bestselling book, The Lean Start Up, one of the most important elements is to start with the Vision, define it, learn from it and experiment. This way entrepreneurs validate their ideas and gather valuable data on the usage of their solutions.
Once that solution has been validated, is when entrepreneurs should accelerate and scale their proposal. Nevertheless, entrepreneurs have to be willing to pivot their HOW and WHAT, while remaining focused on their WHY.
It is always worth remembering that in this competitive landscape, it is paramount to continually move forward and the only way to achieve valuable innovation, that your end users will appreciate, is to have a clear understanding of your vision and your WHY.
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