The essence of a FinTech team

Along my short career I find myself wondering what the keys to success are. I have come to the realization that though the media will tell us stories of successful individuals, few key inventions were conceptualized and industrialized by just one person. So what makes a successful team and how would you put one together?

Along my short career I find myself wondering what the keys to success are. I have come to the realization that though the media will tell us stories of successful individuals, few key inventions were conceptualized and industrialized by just one person. So what makes a successful team and how would you put one together?

The idealist within me wishes that I could provide a recipe for the ideal FinTech team. I would like to be able to say in order to revolutionize the world you need 5 analysts, 10 developers and 17 Data scientists but this still wouldn’t guarantee success. So what is the essence of a Fintech team? I may not have all the answers but I do think there are some common elements in truly successful teams.

Purpose

The word purpose is over used but misunderstood. The true meaning of the word took on a new meaning when described by Viktor Frankl in his 1946 classic, “Man’s Search for Meaning” within the context of a World War 2 prisoner camp. Viktor was a neurologist and psychiatrist who was captured and lived in a prisoner of war camp. He shares his observation on the elements of motivation and depression that he observed in his fellow prisoners.  Personally I think Viktor does a better job at explaining it than I could.

Viktor explains that the reason people survived the Holocaust is they had something else to live for, a true purpose. Sometimes this was as simple as a desire to see their family again, in other cases it was more complex. It is this motivation by purpose is that I believe galvanizes a team.

Salim Ismail insists that all start-ups set a multi transformational purpose. These purpose statements need so be short and to the point so that there is no room for misinterpretation. If your purpose cannot be stated in one sentence, then it has not been distilled into its essence. This helps focus all team members at the same goal. Most importantly it means that all team members should believe in the purpose. Getting this right is almost impossible but I would be willing to bet that successful teams have gotten this right. My memory takes me back to South Africa’s 1995 Rugby World Cup winning team who went through the entire tournament with the purpose statement of “one team, one nation.” A purpose that resonates so strongly in all individuals within the team makes it impossible to fail.

http://www.sport24.co.za/Rugby/Springbok-Heritage/1995-RWC-squad-honoured-for-greatest-day-in-SA-rugby-history-20150624

People

I was in awe of these start-up stories outlining how a group of people started a multi-billion-dollar company in their garage.  In the past few years I found myself in the proverbial garage of multiple different acquaintances and friends, it was only then that I realized what was driving this behavior. I found myself drawn to this group merely because we were enjoying the hard work and the time we were spending with each other. It is easier to accomplish a complicated and long goal when you have good people around you that you connect with. I’m not at all saying that you need to be best friends with all your team members but I do believe that you need to find some commonality to have a human connection.

What about skills?

I’m am by no means diminishing the need for skilled people in your team. I am however making an assertion that even if you have the best skills, without a purpose and connected team you are doomed to fail. Pay more attention to the qualitative things when setting up the team. The things we take for granted like the feeling when you walk through the office doors, the vibe in the room, the “nice to have” social interactions.

So I guess my recipe is this:

Find a purpose that resonates with you. Then find a group of people that you can connect with. If the purpose resonates with your team, I believe you have a good chance of success.

by Tyrone Naidoo

Link to video: https://www.youtube.com/watch?v=fD1512_XJEw

Our book is yet unwritten

2016 was a year of discovery, of adventure, of breaking boundaries. For many it’s been a year of unparalleled innovation – especially for those of us that live in experimental spaces. We’ve long known that innovation is for the brave – those souls who dare to speak out, the curious ones asking “But who says?”.
As I reflect on bravery or courage or heroism, it dawns on me that bravery in any of its forms is remarkably like crazy – or is this simply a matter of perspective?

2016 was a year of discovery, of adventure, of breaking boundaries.  For many it’s been a year of unparalleled innovation – especially for those of us that live in experimental spaces. We’ve long known that innovation is for the brave – those souls who dare to speak out, the curious ones asking “But who says?”

img_6768As I reflect on bravery or courage or heroism, it dawns on me that bravery in any of its forms is remarkably like crazy – or is this simply a matter of perspective? Much of our lives as innovators requires us to quiet the voices in our heads yelling out “You can’t do that! It’s crazy!”. And it’s exactly this act of changing perspective that allows us to see possibility and create a new future – to disrupt our worlds. It takes a special kind of crazy to question assumptions that are years old, to challenge ideals and concepts that work well enough, to be that person in the room asking “why?”

In Adam Grant’s “Originals” (if you haven’t read it yet, what are you waiting for? It’s incredible!), he speaks about “Vuja De” –  the obvious reverse of Déjà vu – the concept of facing something familiar but seeing it with a fresh perspective that enables new insights into old problems.

In today’s world of work, one of the biggest issues we face is creating spaces where people can bring their excellence, where the uniqueness of the individual can be expressed to create winning innovation.  How do we create that winning culture?

For years we’ve followed the rules on how “work” is, a kind of imaginary Encyclopaedia Britannica of how we work. But that imaginary book was written before “we” were working! It was written before many of “us” entered the world of work! Us being women and millennials and innovators and also closet creatives, and evening gardeners and day-time-suit-wearing-iron-men and also… well, most everyone.

Let’s face it, this book was written for a bunch of folk who are now in the minority. And don’t get me wrong, it worked really really well back then, but for “us” in the workplace now, it really does fall short. Many of us feel that our workplaces just don’t enable the way we need to work. So why then are we still using that imaginary book as our core reference guide?

That way of work was perfect for specific workplaces, for a workforce that were all very similar (or were told that they had to be) and for a time that was, well…industrial revolution. We’re in a whole new time, with a whole new workforce, and yet – there is no new book!  We have moved from a world where work was about creating consistency, to a world where work is about embracing each individual’s unique contribution and, if we wish to see that reality, it means we are going to need that bravery to change our worlds of work.

img_6779And it’s right about at this point that I hear Natasha Bedingfield belting out “I’m just beginning, the pen’s in my hand, ending unplanned” and then…a great big ol’ penny drops…it’s time to do some re-writing!

In 2017 I’m keen to see these new chapters take shape.  Let’s take the time to write “the Wikipedia of work” for our future, one that works for us, one that creates space for innovation, for creativity, one that allows every person to thrive, one that isn’t creating a whole workforce of ill-fitting pegs.

We have already rewritten the chapter on dynamic working (literally rewritten), but there are still many chapters that we haven’t even begun to write. We’ve only just started the chapters on what the world of work look could like for single moms? What about the chapters on working dads? Or insomniacs? Or those that live far from their workplaces? Or nocturnals?

And what about the chapter on success? Does it still mean becoming the CEO? Really? What is success if you believe in balancing family and sport and work and creative hobbies? What could that chapter look like?

And what is a career? Is it really a straight-line 20-year plan? What if there was a chapter on changing careers mid-way? Or one on taking a break from your career? Or one on how to come back after a break?

Now is the time for a massive cultural innovation.  It’s the time for new chapters. It’s time for all you brave crazies out there to start recreating, it’s time to get writing. Take it home Natasha… “Live your life with arms wide open, today is where your book begins, the rest is still unwritten”

by Liesl Bebb-McKay

RegTech: a key component of the burgeoning FinTech movement

Unpacking the opportunity to build a robust, compliance function with innovative tech solutions promising many benefits, derived from a number of applications.

http://www.memes.com/meme/554682
http://www.memes.com/meme/554682

A few months ago, I was lucky enough to be “the chosen one” at our consulting firm to join the rest of our team working at the Foundery. I was told that the Foundery was all about developing FinTech capabilities to solve inherent challenges within banking in a unique way. Thus, we had to be up-to-date with the new technologies in this space. “RegTech” was one of these new technologies that were on our radar, and I had to develop a research pack on it… My initial reaction was that of a student opening up her exam paper having no idea where to begin… and in this case, there would be no “winging it” either! Yet, as I embarked upon this journey, I was fascinated by the immense potential of reducing compliance costs for financial institutions using this technology of today to facilitate the delivery of regulatory requirements in an innovative way and wanted to delve deeper into this amazing world of RegTech. So, here are some of my discoveries from this journey:

What is RegTech?

RegTech, as the word suggests, is an amalgamation of regulation and

 https://www.trulioo.com/blog/regtech-solutions-for-regulatory-compliance-requirements/
https://www.trulioo.com/blog/regtech-solutions-for-regulatory-compliance-requirements/

technology, a niche carved out from Fintech. Javier Sebastián, BBVA Research’s expert in digital regulation, also explains that it is deemed a subarea of what is generically known as Fintech. He adds that RegTech providers who are, “harnessing the capabilities enabled by new technologies such as cloud computing, big data, and blockchain, are devising solutions to help companies across all sectors of activity ensure that they comply with regulatory requirements.”

What type of solutions does RegTech offer?

Globally, RegTech encompasses many different technologies that can reduce the cost of compliance & show commitment to high standards of regulatory compliance, through the use of advanced data analytics, risk & control convergence, and sustainable & scalable solutions. The solutions can fall into three buckets: Interpretation, Implementation & Optimisation.

  • Interpretation solutions are solutions that help in decoding regulatory requirements. These include regulatory gap analysis tools, compliance universe tools and training tools to track and understand the regulations & help build risk management plans thereof.
  • Implementation solutions assist in doing the actual work to meet the regulatory requirements. These include regulatory reporting & health check tools, incorporating everything from compiling and interpreting data, to producing gap analyses and ad-hoc reports.
  • Optimisation solutions are customised solutions that simplify the compliance process further, on an organisation level, through automation and machine learning. Management information, transaction reporting & analysis, and case management tools fall under this category. These tools empower compliance functions to make informed risk choices based on data-provided insights about the compliance risks the company faced and how it mitigates and manages risks.

Is there really a need for RegTech?

https://letstalkpayments.com/global-regtech-the-billion-dollar-opportunity/
https://letstalkpayments.com/global-regtech-the-billion-dollar-opportunity/

The cost of compliance in the financial services industry is high, and continuously rising, with the supervisory backdrop growing more complex, and constantly changing regulations and processes. According to the Consumer Financial Protection Bureau of the United States of America, on an average, large banks with an asset size of $1 billion to $100 billion, have total compliance costs of 1.4% of estimated retail deposit operating expense. Operations, HR and IT carry the largest share of these costs. The cost of non-compliance is even higher than the cost of compliance, with increasing penalties and fines paid by banks year-on-year.

 

https://www.trulioo.com/blog/regulatory-curse-regtech-opportunity/
https://www.trulioo.com/blog/regulatory-curse-regtech-opportunity/

Investments in regulatory software have the potential to address this immediate challenge of regulatory compliance which can lead to an ROI of 600+% with a payback period of less than three years, according to letstalkpayments. Hence, the global demand for regulatory, compliance and governance software is expected to reach USD 118.7 billion by 2020. But, yet it still remains a relatively small recipient of Fintech funding. This is because dominant, widely used solutions are yet to emerge, and financial institutions are often still unfamiliar with the technology. Regulatory reform is also not yet complete; uncertainty about the exact reporting requirements makes it harder for financial institutions to choose a particular compliance solution.

Is RegTech here to stay?

With growing regulations, there is a growing demand to oversee data, reporting, and operational processes. A growing number of start-ups have the potential to meet this demand. But, RegTech is about the application of technology to solve a specific regulatory problem, rather than the technology itself. Thus, each of the key players in the system has a distinct role to play in the growth of this technology, through the development of common industry solutions and successful integration into risk management frameworks within the wider regulatory change agenda. Financial Institutions have a primary responsibility for supporting this development, by creating IT and risk infrastructures that are capable of integrating these new solutions.

Supervisors and regulators can also provide support by creating an enabling regulatory environment, where financial institutions can safely share their challenges in compliance and opportunities. The UK is taking the lead to encourage the rest of the world to follow suit. In 2015, the Financial Conduct Authority (FCA) announced its 2016/17 business plan focussed on supporting the widespread adoption of RegTech. The FCA, through its ongoing roundtables and bilateral meetings, has provided a platform for collaboration between software developers, financial institutions and the public sector.

My final take on this?

South Africa has a lot of catching up to do!

by: Rachana Bedekar

Survival of the digital-ist or win-win for banks and FinTechs?

The FinTech revolution’s narrative has changed over the past few months. What was once mooted as an all-out war between incumbent banks and FinTechs is morphing into a story of symbiosis and reciprocity that will unlock value across the ecosystem.

A special relationship

The FinTech revolution’s narrative has changed over the past few months. What was once mooted as an all-out war between incumbent banks and FinTechs is morphing into a story of symbiosis and reciprocity that will unlock value across the ecosystem. A recent article by Sam Maule in Bank Innovation likened the changing dynamic between banks and FinTechs to the relationship between the United States and Great Britain that evolved after the American Revolution into what became known as the special relationship, characterized by unparalleled cooperation on economic and military matters.

dave-1
Source: https://cointelegraph.com/news/moscow-hosts-first-international-bank-sponsored-FinTech-cluster

There is a strong case for collaboration between banks and FinTechs. Banks bring vast existing customer bases, regulatory certainty and data security and FinTechs bring innovativeness and flexibility to create superior user interfaces, product simplicity and seamless integration. The case for collaboration and the emergence of a special relationship is supported by a growing body of empirical evidence. Total FinTech investment in 2016 is expected to surpass the $14.6bn raised in 2015 and banks, led by Goldman Sachs, Santander, JP Morgan and Citi Group, are expected to expand their share of the total. Furthermore, a recent survey by Business Insider showed that only 25% of banks worldwide perceived FinTechs as a threat that they compete against directly. A far greater proportion of banks surveyed saw synergistic potential, with 34% viewing FinTechs as possible collaborators and 25% seeing FinTechs as possible acquisition targets (25%).

Most banks happy to partner with marketplace lenders for now

dave-2
Source: http://www.lendacademy.com/bank-partnerships-marketplace-lenders/

The growing number of partnerships between banks and marketplace lenders is a great example of bank-FinTech collaboration. Peer-to-peer lending has become a misnomer. The preferred term, marketplace lending describes a lending ecosystem where institutions (including banks) take up 80% of the loans. In spite of the general bank support of marketplace lending, some believe that the marketplace lenders could turn on the institutions that supported them.

Even though the flows through marketplace lending platforms and crowdfunding platforms are dwarfed by the flows through traditional bank and financial institution channels, the threat that FinTechs pose to banks is very real. Goldman Sachs has estimated that 7% of bank profits or +$11bn could be at risk of non-bank disintermediation. This explains why some banks, like Goldman Sachs and Wells Fargo, have opted to build their own marketplace lender, while others may, in time, acquire a marketplace lender outright.

Regulators could decide who wins  

dave-3
Source: http://digitally.cognizant.com/open-api-in-financial-services-making-peace-or-trouble/

The adversarial approach from banks may yet become justified. Adopting the view that banks and FinTechs will abandon all hostile intent in favour of cooperation could be premature and naïve in light of the latest changes in regulation. The Revised Payment Service Directive (PSD2) is expected to alter the landscape dramatically and demonstrates the profound influence that regulators can have on the power struggle between banks and FinTechs.

In the PSD2 compliant world banks are compelled to provide third-party providers access to customers’ accounts through open APIs. Effectively, this will enable FinTechs to build on top of banks’ data and infrastructure. Are banks facing the risk of becoming “dumb pipes” in the same way as mobile network operators with over-the-top (OTT) services layered on top? More to come on this in my next blog.

by David Krawitz