Big Thinkers Share Insights on FinTech

Author: NICSA

On October 5, asset managers attending NICSA’s General Membership Meeting learned how to harness the power of FinTech as it shapes the financial service landscape.

Christine Parker, Executive Director, Financial Services Digital Advisory at Ernst & Young LLP moderated the panel, which featured experts from Vestigo Ventures, BlackRock, Accenture LLC and Fidelity.

“Disruption and change really are the new norm and it’s an interesting time to be in financial services—one of the most significantly transitional and challenging times, perhaps,” Parker said. “It’s not about when disruption happens or when these things are coming down the line—it’s here already, so how do we respond?”

Andrew Johnston, Senior Vice President, Strategy and Planning at Fidelity Investments, agreed, noting that FinTech is reframing the industry’s definition of success. “Almost every one of our foundational assumptions—what is speed, what is low-cost, what is a good customer experience, what is the boundary of an organization—all of those things are challenged.”

Achieving success in the era of FinTech often comes down to finding the best strategy, whether it’s to build, buy or partner.

“For us, the decision really comes down to ‘do we have a core competency in this area, and if we don’t, how do we get it?” said Jim Mackinaw, CIMA, Managing Director, Digital Wealth Solutions, BlackRock. “Is it better acquired through partnership, or is it better acquired through purchasing that capability?

From a venture capitalist perspective, Ian Sheridan, Cofounder and Principal of Vestigo Ventures, detailed how his team decides where to invest in FinTech.

“As an investor in financial services technology, we’re not looking necessarily looking for the Uber or the ‘unicorn,’” Sheridan said. “What we’re really hunting for are the companies that can bring real solutions to this industry—to all of you—and know how to partner and engage with you within your tech stack in a meaningful way.”

Peter Sidebottom, who leads North America Banking and Capital Markets Strategy for Accenture LLC, said his company helps resolve cultural conflicts between established financial institutions and FinTechs.

Whereas Fintechs typically approach innovation as a question of “why not,” Sidebottom said financial institutions take a more defensive stance, drawing out the collaboration process to as long as nine to twelve months. The most successful teams are able to move from “idea to deployment in a much faster period,” Sidebottom said.

Instead of relying on an individual source of innovation, Mackinaw pointed to the value of nurturing a company’s ecosystem of innovation.

“Innovation is everyone’s responsibility,” Mackinaw said. “What becomes important is that the information within an organization is able to flow more quickly, and that the lines of communication and the collaboration technologies that you have internally are well designed such that—even in a hierarchical organization—it still feels extraordinarily flat.”

In order for that to happen, organizations need to get more comfortable creating avenues for information to be shared and received more quickly. “It makes the difference between success and failure,” he said.

External communication also needs modernizing, Mackinaw said. “As a whole, we are an industry that has communicated with our clients through the same three platforms for decades: We either knock on their door, we dial their number or we send them an email. That’s not how most of us communicate in our day-to-day lives.”

Ultimately, the industry’s success incorporating new technology boils down to a basic litmus test. “As an industry, we will have made it when ‘FinTech’ as a word ceases to exist,” Mackinaw said.

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