Fintech Insights from Innovate Finance 2022

I have always found it energizing to be amongst entrepreneurs, founders, teams, and people in the Fintech space. Innovate Finance was one such event that brought all kinds of fintechs under the magnificent setting of Guildhall Art Gallery in London. The high-quality content helped shine a light on priorities and challenges faced by Fintechs of all kinds.

1. The future of financial services is an ecosystem of niche services, moving away from traditional banking offerings - paraphrasing this prediction from the CEO of Klarna, whom I enjoyed listening to while admiring his vision & purpose for Klarna and clarity of thought on the strategy execution.
2. Regulatory compliance is no longer an afterthought. Fintechs need to start factoring regulations (current and future) as part of their business model and strategy.
3. At the same time, regulations will need to evolve and adapt to new business models (e.g., BNPL). Applying legacy regulations to new business models risk stifling innovation in the longer run.
4. Investors (VCs / Angels) are increasingly pivoting towards profitable growth. Customer Acquisition Cost (CAC) and Customer Life Time Value (CLTV) is becoming essential metrics in fund rounds, extending the definition of growth.
5. Due to the above, some fintech scale-ups have to choose between quantity (i.e., more quantum of customers) over quality (i.e., more value from existing/new customers). Two very different options demanding a different strategy and execution
6. Some fintechs find it challenging to cope with the growing pains of scaling the business from front to back. With their core strengths in the front of the value chain, it can be daunting to scale for operational resilience, customer service, and other back-office operations while maintaining the promise of the north star experience on the front end.
7. Fintechs are learning how to tap into a broader ecosystem of partners and suppliers for help in areas outside their comfort zone, such as regulatory compliance, scaling customer service, and other operations efficiently.

As Fintechs start breaking through the startup phase, they are likely to face similar challenges as some of the incumbent competitors. Be interesting to see how they navigate these challenges while maintaining the fintech-Esq essence and the promise that comes with it.

Thanks to Genpact for this fantastic opportunity to participate in this conference. Above everything else, it was great to spend quality time with some of my colleagues outside Teams :)

The above article represents the author's personal point of view. This is not an official point of view from Genpact or any other organisation mentioned in this article.