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TOP 10 FINTECH IDEAS FOR 2020

January 07, 2020
V. Ramkumar – Senior Partner, Cedar Management Consulting

#1 BUILD FOR THE FLAT WORLD
In the FinTech world, the learnings from a use-case in South America could very well resonate instantly in say, India, as the world has never been so flat. Look for the learnings that can be adapted across geographies and markets, and get to address the segments you’re dealing with. Micro-services for the bottom of the pyramid, for example, has a universal appeal. Well, the world is not enough!

#2 PICK YOUR USE-CASE BATTLE
The greatest of innovations find their way to credit only when they address an implicit necessity. After all, necessity is considered to be the mother of invention. Let your resources not be invested in a not-so-useful application, however esoteric the underlying innovation can be. In the battle of use-cases, the most relevant wins, and not necessarily the most revolutionary.

#3 LOOK TO COLLABORATE THAN TO COMPETE
Sustainability is key to scale, and wide adoption is a pre-requisite to sustain. And a  collaborative ecosystem is key for adoption in the disintermediated world. Particularly where banks are perceiving FinTechs as competitors, building a sustained participation with industry players is key, even more so now in the emerging era of APIs and Open banking.

#4 REGULATIONS: FLOW WITH THE FLOW
Watch for the regulators, and the winds of change that regulations bring along. No we aren’t talking just about Regtech here. Be it data ownership or cloud hosting or blockchain adoption or for that matter, API enabled open banking, compliance to regulations is pivotal. Building awareness, redressing concerns and enhancing the appreciation of impact in the right regulatory forums is critical.

#5 DATA IS THE NEW GOLD
Knowledge is power supreme, and data is the feeder to building insights. Be it knowing the customer better, or predicting the need or simply improving accuracy and effectiveness driven by technology, the oxygen underneath is data. There would be no takers for the best data model, for example, if the underlying data was an impossibility to fetch. Staying focused to build the data pipes is key to success in the new FinTech world.

#6 STAY SECURE TO SECURE CLIENTS
Financial world is moving from KYC (Know Your Customer) to KYD (Know Your Data). As banks and institutions are looking to build higher security and compliant, it becomes imperative for every FinTech to build higher layers of protection on data security. Investing in data security is a pre-requisite for securing new business.

#7 FOCUS ON THE ENDS, MORE THAN THE MEANS
All’s well only when it ends well. Getting obsessed with the idea itself, is the most common folly that FinTechs end up with. Ultimately, the innovation needs to deliver on a larger end – which is on revenue enhancement, efficiency improvement or risk management. And connecting the dots there is going to be key.

#8 KEEP IT SIMPLE: WHAT, WHY AND HOW
Any idea that cannot make a compelling and quick answering to the 3 questions “what, why and how”, is not worth the attempt. “What” defines the value proposition, “Why” states the impact, and “How” describes the operating model. And keeping it simple is the name of the game.

#9 UNLOCKING VALUE
Approaches to valuations notwithstanding, the most important part of any venture is in its ability to unlock value for the investor and/or incubator. Keeping the shareholder value in context also means focusing on the right knowledge assets, customer logos and getting the business model to perfection. Locked value is lost value.

#10 BE ADAPTIVE TO CHANGE
To quote Charles Darwin, it’s not the strongest species that survive, nor the most intelligent, but the ones most responsive to change. As regulations change, and the demands of the marketplace become different, being able to align with the winds of change would be the key success factor.

Welcome to the new decade and welcome to 2020!