FinovateFall 2019 Spotlights Urgency for Financial Services to Innovate or Get Left Behind

FinovateFall in September is always one of the most highly anticipated shows for the FinTech industry. With over 1,600 key influencers, 60+ live demos, and 120+ expert speakers, it’s four intense days of networking, learning, and strategizing for the future.

While this year’s major themes centered around big data, analytics, AI, customer experience (CX), and digital transformation, an underlying buzz said change is in the air. The anticipated change isn’t just about the new tech, which is always exciting, but the shrinking generational digital divide. We are entering unprecedented times where the largest wealth transfer in history will start taking place, and the younger generation is beyond just digitally tuned-in—they don’t know any other way of life.

After reflecting on the show, we’ve distilled what we learned to these four take-a-ways:

1. Disruption is real and is happening.

We’ve been hearing for some time that the financial services space will be disrupted by the digital economy, but now that time truly seems to be here. Digital-only banks such as Ally are gaining market share, big tech giants like Amazon and Apple have launched digital financial service offerings, and traditional financial institutions such as US Bank are going beyond simple digital strategies to develop highly-personalized, smart mobile banking applications.

“When it comes to financial systems, there are a variety of major threats to the status quo,” wrote Greg Palmer, Vice President of Finovate and Master of Ceremonies for FinovateFall 2019 in his recent blog. “But an alarming number of FIs [financial institutions] are falling into the same trap…they aren’t making the ‘responsible’ or ‘grown up’ decisions right now that will make their lives easier in the future. Instead, they are waiting for the next big shock to force them to.”

The big message from the conference was either innovate and disrupt your financial services company or be disrupted by someone else. Disruption is happening.

2. Company culture can make or break your initiatives.

Although FinovateFall 2019 showcased new tech, many of the session speakers mentioned company culture as a critical factor in transformational initiatives. Cultures must become more agile, innovative, and customer centric to stay competitive. In “Building a Culture of Innovation,” panelists from HSBC, Amazon, and Ondot Systems stressed the role leaders play in a company’s cultural change. It starts at the top with clearly defining and articulating the vision, aligning staff and champions, and proactively managing the process.

They also said to look at examples outside of financial services for inspiration. Companies in other industries have built centers of excellence and innovation labs to help foster creativity, and these lessons can be applied to financial services. If customers are having simple, impactful digital experience with non-financial services industries, they will expect the same from their banking and insurance institutions. Panelists warned not to outright mimic the competition or other industries, however. Take the time to understand what your company’s end customers are seeking, and what makes sense for your company’s team and your company’s brand. Your culture can be a competitive differentiator and driver of transformation.

3. New technology is an enabler of, not a substitute for, sound strategy.

It’s easy to get caught up in the latest and greatest technology as the solution to digital transformation and digital customer experience. But technology is only an enabler of a sound strategy and a thorough understanding of what your current and future customers want and need from your institution.

In the session “Delivering the Next Generation in Customized Customer Experience,” executives from Bank of America, Citi, and Northwestern Mutual discussed the importance of investing in digital experiences that are personalized to the varying needs of customers spanning generations. They recommend mirroring the digital experiences with which customers are already familiar and integrating services into those channels that customers are already using. They also reminded us not to discount the influence of Millennials, as they are promoting change and increasing adoption of digital experiences within older generations.

4. Turn legacy systems from roadblocks to facilitators of innovation

For large, well-established, and decades-old brands, legacy technology is just a fact of life. A few sessions addressed using APIs to extract data from legacy systems to power analytics, dashboards, reports, and even new services. While these API transformation programs can potentially unlock some of the value of the legacy systems, the sessions also included discussions about modernizing legacy systems as part of your overall technology strategy.

The reality is that systems built on aged or legacy technology can be vulnerable to cyberattacks. (Just ask Equifax.) Yet some of these in-house applications still operate core business operations. Rather than bolting on net new technology, develop a plan to modernize these critical legacy applications to help enable the digital experiences that consumers want, while reducing security risks.

Thanks to @finovate for a fantastic show. See you next year!

About Synchrony Systems

At Synchrony Systems, we help financial services companies transform legacy, in-house applications to modern technologies while preserving business-critical functionality. Using the world’s only Modernization Lifecycle Platform, Synchrony Systems provides an automated, reliable, and transparent modernization while ensuring 100% functional equivalency with no operational interruptions. And with our continuous upgrades, your in-house applications will never fall behind again.