The challenge of developing true FinTech

“FinTech” is all the rage these days. However, simply having some technology in a finance firm does not encapsulate the spirit of FinTech – not only must the technology work and meet the needs of the business, but it must also serve to change the way things are done.

There is a real risk to the finance industry that disruption comes from outside the industry. Firms that place developers at the forefront with a blank sheet of paper are not shackled by legacy approaches.

Historically, in many financial firms, developers have been seen as an IT function. As a result, the approach to technology has tended to place it as a back office function that is detached from its users.  This is fine when you are building things that are not dynamically changing. However, when trying to innovate, does this back office approach really get the best result?

At its core, innovative FinTech is looking either to replicate or enhance a function currently performed by a human. This requires developers to understand intricately how a business functions and operates. Being locked in a back room, away from the action, is not conducive to being able to do this.

Perhaps a solution, therefore, would be to integrate the technology team within the core business functions. This would ensure that the developers could see, first hand, how things are done. Developers will always find it easier to replicate a process if they can understand it. Equally they will find it easier to see how they could disrupt a process and, as such, enhance it.

This, of course, brings new responsibilities to both technology teams and the business’s wider workforce, who have to commit time and effort to communicate and understand new concepts in different areas to their own expertise.  This presents both a challenge and an opportunity.

The challenge will be in establishing this more integrated way of working. The opportunity, however, is access to the vast and varied knowledge base that exists in a financial firm. If the two can be successfully combined then some real FinTech may actually emerge.


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