Customers have ever-increasing expectations when it comes to financial services. They insist on easy-to-use systems and design. They want personal convenience. And they want demonstrated value over their current banking, payment and investment practices.
Financial services institutions agree. From Santander referring businesses to peer-to-peer lending platforms, to Zurich’s creation of a digital workplace established players are looking to create new efficiencies, and provide greater convenience, customisation and reduced costs.
We can do better. We can create new efficiencies, and provide greater convenience, customisation and reduced costs. Technology developers are also on board. In the past few years, hundreds of APIs have been created to improve the way people invest, spend and save money. So why are we not seeing a true revolution in financial services?
Well, invention is not the same as innovation. For something to become truly, disruptively innovative, it must be embraced by the mass market. And although fintech is booming, I’d argue that it still remains the province of early adopters. Many promising fintech startups have already failed due to the big gap between those early adopters and the mainstream market, and the gulf in behaviours between the two.
How come Well, in financial services, probably more than in any other sector, it’s especially difficult to overcome the forces of inertia and trust. After all, there are few things in life more serious than money and if someone’s going to place their savings or investments in the hands of a company, they?ll want to have confidence that the company they choose has the scale and longevity to keep their hard-earned cash safe.
Similarly, it’s not always the case (and in fact quite often isn’t) that those who are adept with technology are qualified to understand the needs of financial consumers and retail investors. The result: many brilliant new technologies are often never expanded beyond their original niche.
If that’s the challenge for fintech young guns, then the challenge for established financial services firms comes from the other direction. Most big finance institutions employ people who know their customers and their products, but don’t know how to manage technology. Established processes and bureaucracy also tend to strangle the development of new ideas before they make it off the whiteboard. Lean and large don’t often go hand in hand.
At Octopus, we realised that to cement our standing in the marketplace, we needed to transition from a financial services firm with an IT department, to a technology company that excels in financial services. And we knew that we couldn?t afford to lose our agile, startup spirit.
That’s why we developed Octopus Labs: so that we could combine the best of our established financial services credibility a heritage of over 15 years, managing more than ?6bn on behalf of 50,000 customers with a new and powerful digital capability.
And part of that involves scouting out high-potential, product ready teams that we can support and help grow. Through a 12-week accelerator programme, we re giving five exceptional teams Cityfalcon, Moola, Squirrel, Freetrade and Advicefront free workspace in our central London HQ and unique access to our distribution networks. We re excited about what it can mean for them, and us.
We re doing it because we know there’s a world outside the walls of finance. New ideas are forming every day, some of them still coming from basements and garages, dorm rooms and university computer labs. Some present opportunities never before considered, and some could cause us to completely rethink our understanding of finance.
Richard Wazacz is the head of Octopus Labs