Fintech On Benzinga: Incrementally Easier Is A Game-Changer

One of the key challenges for any fintech business, or any business for that matter, is visibility into how people are using your products and services.  Data analytics are improving but from team members to customers, there is still toil and delight that goes unseen to decision-makers.

Dan Gilbert, the founder of Rocket Companies RKT, Bedrock Detroit, StockX and the owner of the Cleveland Cavaliers, will often host an all-day orientation with new hires talking about the history and culture of his companies.  When I attended this event, known as ISMs day, I came away with memorable nuggets of truth that I still use on a daily basis.  One such example was how Dan would talk about workflow and process.  The vivid picture he would paint is one many of us had experienced.  There is a sidewalk surrounding beautiful green grass in the middle of a college campus (or office park or city park, you get the idea).  The sidewalks are clean and clear.  And right through the middle of the grass is a worn, brown footpath.

Even though there was a nicely designed and maintained sidewalk, the faster and more efficient route is straight across.  

Imagine now that the sidewalk is how your company has designed the process but the footpath is how your team members operate on a daily basis.

What do you do? 

There are 3 possibilities.

• Ignore the issue and continue to maintain the formal process while “knowing” that no one is using it.  This introduces risk and wastes time & resources.
• Block off the grass with a fence, signage and/or other impediments to restrict people to the primary or formal path. This introduces waste and likely resentment.
• Embrace the path and make it the way.

Dan Gilbert would also choose the final, most efficient option.  If that’s what people are doing, just make that the process.

Lean into human nature.

This is an important lesson for setting up process improvement and change management in any organization.  It is also relevant for any fintech company today.  Whether your fintech company is B2B or DTC, this lesson applies to your clients (i.e. users).  Have you built a product or experience that is intuitive and maximize human nature? Or are you asking people to change, train or retrain their behavior to meet your offering.

By and large, companies want to modernize and innovate.  Consumers want improved products and experiences.  Where it gets complicated Is what each is willing to sacrifice for it.  The degree to which financial services companies ask people to forget their human nature or, worse, defy their instincts in order to accomplish a task is the measure of how successful the company will be.

It does not matter how amazing or valuable the product may be; if it does not make sense to adopt, it will be devastating for you business.  (Plus, you’ll probably end up there anyway so why fight it?)

Fintech should be intuitive and incrementally easier than the status quo.  

Sure, I’m an innovator, I’d love to tell you more about how fintech will revolutionalize the consumer experience and disrupt incumbent capitalism.  Emerging technologies like distributed ledgers and tokenization are on that path but there is a much room for progress and success in incrementally easier.  

Struggles in incrementally easier

Right now, one of the most common startup categories in fintech is digital card / digital account.  There are tech-enabled apps popping up for every consumer segment in the market.  Similar to credit cards 20 years, there are fintech banks branded for your interests:  eco-friendly consumers, black-owned or black-supported, geography-based communities, and budgeting or reinvesting focused users.  Unlike credit card branding, however, few people see you flashing your fintech app around, not to mention that fewer consumers identify with their banking relationship the way they would with a physical card.  

The fintechs that are succeeding are making banking and payments incrementally easier for their early adopters and loyal users.  Adding something to the consumer experience that did not exist before.  The ones that fail have a great story or look & feel but have not made any change to banking or the banking relationship.

The more complex the product the more difficult it is to introduce something new to the relationship.  The mortgage lending business is experiencing this right now.  The underlying products are commoditized and the process is heavily regulated.  Therefore, it becomes very difficult to introduce any consumer-friendly innovation.  That’s why you see “incrementally easier” being the best differentiator in the marketplace right now.  The aforementioned Rocket Mortgage has changed the industry, not to mention the consumer experience, by creating a path that is incrementally easier.

Reasonably good measure of your value proposition

I would argue that adoption and stickiness rely on a combination of value, ease of use and emotional response (i.e. branding and consumer identity). Intuitive value proposition and incrementally easier than the status quo is a path to success.  Netflix started with DVDs in order to get into people’s homes.  Your fintech innovation does not need to put JP Morgan out of business; it need only help a targeted audience capture value in a slightly easier way than their current way.

The 3 ways to get started are:

• Find the path and build your process around how people actually think and work
• Test your product fit and process to ensure your value is incrementally easier to access
• Do not let this talk you out of your big-dream-disruption (just because incrementally easier works does not mean it shouldn’t be on the path to the true innovation)

Thanks for reading and continued success.