Corporate innovation will be important to surviving digital disruption. Susanne Chishti, CEO of FINTECH Circle and Chairman of FINTECH Circle Innovate, who was a lecturer in South Africa recently for the first ever Fintech Academy Africa has said.
Chishti, considered one of the leading authorities on digital financial services in Europe, said African businesses would need to make corporate innovation a strategic focus area and develop a comprehensive fintech vision and strategy for the whole organisation to keep up with local fintech trends.
The term fintech refers to an economic sector that sees business using technology to adapt traditional financial services to modern social reality. The two-day academy held in Gauteng, was presented by London-based, FinTech Circle and The Cape Innovation and Technology Initiative (CiTi) to give local executives a quick, deep dive into global trends and best practice in fintech; in response to the accelerating pace of disruption to legacy banking and financial services models.
At the event, Chishti said the fintech industry is booming globally with important sub-sectors like WealthTECH, InsurTECH, RegTECH and Blockchain technologies gaining traction. With entrepreneurs needing less start-up capital in a digital world and increased global investment, many banks are now creating corporate venturing arms to invest in fintech.
“A shift to co-creation leads large banks and insurance firms to work with agile, small start-ups to come up with fintech innovations which can be rolled out at scale,” explained Chishti. Coupled with the threat of unbundling traditional banking services from tech giants like Apple, Google, Amazon, Facebook and Paypal, Chishti said financial institutions will need to open up to innovators through an open API (application programming interfaces) strategy and attract top developers; to stay competitive.
Together with Ian Merrington, the course convenor and CEO of CiTi, Chishti looked at incubators and accelerators in the fintech world.Both trainers encouraged start-ups and corporates to consider collaborating by way of incubators and specialised innovation and technology hubs.
According to Nicole Anderson, FINTECH Circle Innovate’s CEO, besides a slight slump in 2016, global investment in fintech has been growing year on year since 2010, with Asia and the US leading the way. Popular funding methods include corporate venturing, peer to peer lending, crowd funding and angel investing, which relies on a network of investors who specifically help start-ups.
Merrington also presented a segment on fintech’s role in financial inclusion, where the technology coupled with increasing mobile penetration on the continent is beginning to enable greater FinTech inclusion
FINTECH Circle Innovate’s Senior Regulatory Risk Expert Patrick Butler spoke on the subject of compliance in the fintech industry.Butler said the industry is seeing new focus on personal decision making and accountability. “Weak personal accountability and ethics are where failures start,” explained Butler.
This means that businesses need to spend as much resources on outcomes-based behaviour as controls. “Sustainably successful innovators will embed the behavioural trend in regulation, whether for customer-led or control-based solutions.”
Gavin Marshall from Blockchain Academy Africa shed some light on blockchain technology and how it enables the transfer of value. He explained that while this innovative technology is considered disruptive, it has many uses.
The FinTech Academy is just one of the benefits resulting from the recent partnership between FinTech Circle and CiTi; that runs dedicated Open Innovation Clusters in FinTech, EdTech and Data. These include specialised incubation programs and co-collaboration to offer support to businesses dealing with digital disruption.