Unlikely bedfellows or perfect partners?
Sean Sarginson, Global Head of Innovation at SWIFT explores how harnessed disruption will shape the landscape of tomorrow for the financial services sector
Progress and change is constantly reshaping the world around us. Decades ago, before any notion of just how game-changing ‘fintechs’ would become, banks and other financial service institutions were very different. The same high-rise glass buildings still line the financial capitals of the world, but chips and algorithms are now just as important as gold reserves and bank notes.
Our theme for Sibos 2019, ‘thriving in a hyper-connected world’ captures the industry’s technological revolution. Innovation is essential to finance, but the sector’s relationship with innovation is changing quickly. Fintech ecosystems are morphing away from disruption, no longer trying to outpace the legacy systems of financial stalwarts and instead opting for collaboration. We are future proofing our industry by integrating disruptive digital technologies into established banking infrastructure at a pace never seen before.
Undoubtedly, fintechs offer exciting solutions that open up new possibilities and change the way financial transactions take place. But the established players have advantages of their own; global banks have strong distribution, customer loyalty and reputation, and remain hungry to do something new. This dichotomy means financial institutions are capitalising on the opportunities that collaborating for innovation offers. The result? The successful adoption of new technology with a common goal - improving the experience for the end user.
We’re seeing more and more organisations opting to partner with fintechs in a bid to drive innovation, developing solutions together that will shape the future of payments and securities. This is exactly why we created the Discover Zone at Sibos – to provide a platform that can bring together senior stakeholders from across the financial services spectrum, initiating the handshakes that lead to the cultivation of new concepts, ideas and solutions. In bringing these players together, we help both established and new market entrants tap into each other’s strengths.
Collaboration comes with its own unique set of challenges. Innovation has never been seamless; separated by cultures, experience and – often – generations, the task ahead for banks and fintechs can seem daunting. Communication is an often-overlooked aspect of this. Successful collaboration requires organisations to have a clear understanding of their respective strengths and roles in the partnership, as well as a commitment to mutually beneficial goals. Facing these challenges by learning from one another is how progress rolls on in the great innovation game.
Every day we hear about how disruptors are challenging long-established business principles and re-defining the rules. These trends tend to evoke scepticism - can such unlikely bedfellows as banks and fintechs work together sustainably? But collaborative innovation is here to stay and is where the future will be born. Harnessing disruption to drive, not displace, the existing financial services sector will shape the landscape of tomorrow.