President, Intuit Canada.
We’re entering a golden age of Canadian fintech, with total funding reaching $566-million in 2017, up from $559-million in 2016. Consumer adoption of fintech is expected to increase in Canada from 18 per cent to 34 per cent within the next few years.
It’s not all roses, though. Greater public trust in traditional institutions can make it difficult for new businesses to find success and there’s tremendous pressure on these emerging players to establish credibility, fast. As the ecosystem matures, a new class has emerged in the centre of the continuum between financial institutions and startup disruptors: the “established fintech.”
How can early stage companies make this transition and find long-term success? This has been on my mind recently since Intuit Canada was awarded Established Fintech of the Year in November. Here’s my advice on how businesses can establish longevity in this rapidly expanding, highly competitive market.
Make friends with Goliath
After seeing the radical disruption ridesharing services inflicted upon the taxi industry, financial institutions are understandably concerned about how emerging tech will disrupt their own sectors. Initially, fintech companies were painted as harbingers of doom for traditional banks, brokerage firms and insurance companies. As institutions come to understand the growing fintech ecosystem, however, they’re starting to realize the opportunities for mutually beneficial collaboration. According to the World FinTech Report 2018, more than 75 per cent of fintech executives surveyed said their primary business objective is to collaborate with traditional firms, such as banks and insurance companies. Only 18 per cent said the main goal was to compete with the established players.
Build strategic partnerships with financial institutions to create new opportunities for growth and deepen trust with consumers. Through collaborations with major banks, you can unlock access to millions of potential new customers and, together, better meet your existing customers’ needs. For instance, Intuit Canada recently announced the pioneering work we’ve been doing with Canadian banks, with CIBC first out of the gate to combine their powerful banking capabilities with critical insights from QuickBooks Online, helping our mutual customers make more informed decisions in real time.
Staying on top of your organization’s strengths and gaps in expertise or product offerings will help you uncover new opportunities for cooperation and drive long-term growth. If you choose to view traditional institutions as a threat rather than an opportunity, other players – like Big Tech – will take your share.
Purpose-driven leadership as your North Star
Why and how is your organization challenging the status quo? How is your technology being deployed not only to change consumers’ finances, but their lives? Purpose-driven companies have a stated and measured reason for being, embodied by their core values, which should inform every single decision made from brand strategy, to product development, to strategic partnerships and beyond.
You need to connect your technology to a broader purpose and communicate that you’re doing more than providing a service – both externally to customers and internally as well. Research from the EY Beacon Institute and Harvard Business School found connecting employees with an organization’s purpose brings measurable business impact and companies that lead with purpose are more likely to be profitable: 58 per cent of companies with a clearly articulated and understood purpose experienced growth of over 10 per cent, compared to 42 per cent of businesses not prioritizing their purpose.
Place a premium on continuous reinvention
We often look to tech when it comes to innovation and disruption, but there are many unconventional leaders who have reinvented their industries. Take Sir Alex Ferguson, for example. The former manager of Manchester United is known as one of the greatest coaches in history, winning 13 Premier League titles along with 25 other domestic and international trophies. With such a solid track record, you would think that Ferguson wouldn’t have strayed far from his formula for success over his 26-year career with the club, but that couldn’t be further from the truth. In fact, he felt he couldn’t afford not to change. From being one of the first clubs to predominantly feature young players in his squad, to embracing the latest technologies in training, Ferguson was constantly reinventing the management of the club to keep pace with the evolving league.
The fintech ecosystem is no different – it’s rapidly changing, and you can’t afford not to keep up. Instead of waiting for impending crisis to prompt you to make changes, act early, even if it’s risky. I’ve always been a firm believer in failing fast. For Intuit, this meant gambling on opening up our platform to developers to accelerate innovation and solve our customers’ greatest problems.
When embracing self-disruption, you need to give yourself and your team permission to admit mistakes, shortcomings and failures. People are often afraid of being reprimanded or punished when things go wrong, and this fear of failure leads to stagnation. Lead by example. Change flourishes when top managers are transparent with their own mistakes.
Establishing the right strategic partnerships, finding your organization’s purpose and constantly taking steps – big or small – to reinvent your business have been the key to longevity for Intuit and can help emerging players in Canada’s fintech ecosystem find similar success.
Executives, educators and human resources experts contribute to the ongoing Leadership Lab series.