Consumer Demand: at the Heart of Fintech Innovation

The ability of incumbents to innovate with the agility of disruptors has long been perceived as an uphill battle with unmatched opponents clambering to take lead position. Rather than being borne strictly out of competition, the best innovation comes from looking to where demand lies and acting upon that need.

Innovation is found in the gaps between adjacent industries and technologies. Borrowing from new areas to solve problems on your own is often the most successful way to encourage innovation. Instead of looking narrowly toward professional services for insight, organizations should work with their customers when developing new products and services so they can help shape and design propositions that are really relevant to their needs.

While incumbents may have entrenched levels of trust and reputational strength, disruptors aren’t burdened by legacy systems or the potentially poisonous bureaucratic lags that come with large institutions. Disruptors have a huge role to play. Some fintechs set out explicitly to collaborate and not all fintechs set out to challenge the banks. Indeed, many remain content to leave highly regulated core functions to the traditional players. In this sense, ‘collaboration’ is a rational response from market players seeking to address market scale quickly – or conversely, test and access tech quicker than they could otherwise develop.

Regardless of how successful they will be, you cannot ignore the intellectual inheritance neobanks have delivered to the broader industry – new ideas and ways of operating products. Banks must keep pace with these changes and customer demand to stay relevant - and sustain their top-line revenue growth.

Opportunities such as open banking and novel digital propositions which are ignored in this space will increasingly materialize as strategic threats. Banks have sought to collaborate with firms to help them achieve this, therefore encouraging efficient sharing of knowledge to mutual advantage helping to tackle common challenges.

When talking about money and people’s finances, trust in an organization is also a key factor. This is where established providers can bring real benefits to their carefully selected partners. Innovation is all about bringing together the right partners and the right people to deliver for the needs of customers.


Innovation should create a differentiating customer experience. It’s the only way to stand out from competitors. Innovation is not about gadgets. Banking should be personal, instant, relevant and seamless. Customers expect that nowadays.

Consumer expectations are changing. The world has been changing through technological developments at a quickening pace over the past few years and (partly as a consequence) consumer behavior. Consumers are used to instant satisfaction and excellent service. People expect banking to be like that. Covid, like any unexpected massive rapid change brings both threats and opportunities in a context where the speed towards digitization is accelerated. Definitely an attractive ground to generate ideas with high level disruption potential.

However, while there is that knee-jerk reaction for traditional players of rejecting technology incumbents from the financial sector, banks must remember Uber, Airbnb and Amazon and their success, and dramatic disruption on their respective industries and beyond. From these seismic shifts we now have Amazon Pay, Amazon Prime and Uber credit and debit cards demanding attention for the market share they are expertly carving out.

In addition to this, while challengers might not be making a similar profit in comparison to big banks, it must be noted that large institutions are reportedly seeing their revenues slashed as a result of the emergence of neobanks.

Because of this, many banks are deciding to unveil new strategies and therefore, new products and services that diversify their portfolio. This in turn allows them to reach more customers. However, it remains to be seen whether this will emerge as a trend or is just an indicator of the appetite for investment and the Covid-19 fallout is likely to expose new victims.


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