FICO: Innovation in Fintech Needs to be ‘Mass Produced’
Today, leading banks are in a race to respond to customer demands, delivering innovative digital solutions to make banking as customer-centric as possible.
Of course, the technology is there, but to deliver the most novel solutions companies in all industries are “under pressure to create invention factories”, bringing together different teams to deliver the right solutions for their clients, says Bill Waid, Chief Product & Technology Officer at FICO.
Bill likens the need for ‘innovation factories’ in financial services today to 19th-century invention institutions, with the Edison Innovation Foundation and the Thomas Edison Center prime examples for modern companies to draw on; they were institutions that delivered new inventions at pace.
“Once in operation, Edison’s laboratory began churning out major new inventions at an astonishing pace: Opening in March 1876, it quickly introduced the electric copying machine (1876), phonograph (1877), filament light bulb (1879), electric lamp (1880), motion pictures (1888) and hundreds of other innovations,” he says.
Finserv: Mass production of innovation
But, what exactly have Edison’s 19th Century inventions got to do with the burgeoning technologies taking hold of 21st Century financial services?
The key is in the platform on which Edison’s factory, Menlo Park, operated. “Menlo Park was successful because it brought together a dream team of top scientists, engineers, physicists, mechanics, machinists and draftsmen from all over the United States and Europe,” Bill continues.
“They worked as a collaborative team, sharing expertise, scrutinising ideas, challenging assumptions and pushing for better answers.”
For Bill, this is what financial services firms need today, a collective spirit and culture of innovation to leverage the latest technologies am deliver services faster that are more attuned to their customers’ needs.
For fintechs, this collectivism can help drive next-generation, information-based products that can better serve financial institutions.
“If firms feel like the pressure is on, they’re not alone,” Bill says. “In a recent study, ‘The State of Business Building,’ business leaders told McKinsey & Company that by 2026, they expected half of their revenues to come from products, services or businesses that haven’t yet been created.
“The digital transformation gold rush is on. UK banks are responding to increasing customer demand for digital solutions with investment in innovation and new tech.
“The UK is leading the way in the fintech space, demonstrated by the £5.1bn (US$6.4bn) of invested capital in 2023 - more than the rest of Europe combined. There’s no time for delay, the battle is coming whether banks and other financial institutions are ready or not.”
FIs need the right platform to innovate
Speed and time to market are critical for FIs today, as they seek a competitive edge in the modern-day. This can be delivered by deploying an enterprise decisioning platform, helping innovation teams orchestrate their digital transformation efforts.
“In many respects, a platform serves the same purpose as Edison’s invention factory,” Bill continues.
“However, instead of everything being under the same roof, it’s all connected to the same cloud. Deploying a platform needn’t be an expensive, arduous undertaking. Done properly, it simply unifies and brings interoperability to existing legacy resources.
“This fosters enterprise-wise collaboration and synergy among people, processes and technologies already in place.”
- Collaboration: A platform unifies all information across the business to make it interoperable across all departments and applications.
- Innovation: A platform gives businesses a foundation upon which they can continually experiment with new ways to repurpose and repackage their customer decision assets in different configurations.
- Acceleration: Speed is an unbeatable competitive advantage in digital business.
“There is a fourth advantage of an enterprise platform that wasn’t available in Edison’s time, concludes Bill, “simulation. In information-intensive enterprises, simulation gives companies the ability to quickly model decisions and strategies—based on their real-world data—before they are implemented.
“Variations can be easily tested until the optimal outcomes are identified, typically in hours or days, depending on complexity. This allows all stakeholders to see what the future holds, form consensus and devise a go-forward plan from the business ROI perspective.”
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