[Fintech entrants are creating financial services industry disruption by changing the customer value equation and causing a major impact on consumers behavior. Fortunately, the history of innovation and the design thinking process provides many proven lessons on how to most successfully respond to accelerating rates of change and disruption in your industry. The first most important step that is cited is to take time upfront to deeply study the challenge before you and isolate the core issues. Then, and only then, can you uncover the best competitive opportunities for your business. This measured approach provides a much more efficient and targeted direction, allowing you to marshal the right resources and activities to strategically respond versus merely reacting.
That is why insightful market and client research is so crucial to set the proper mindset and strategies needed to provide ongoing value to customers in our current environment of accelerating change. It is for that reason that the Institute is thrilled to be able to explore this topic more fully with Steven Lewis, SVP of MarketBridge — a marketing and research firm with 25 years of experience in helping businesses develop and implement innovative go-to-market strategies across their evolving customer lifecycle.
We will focus in this first of two interviews on the initial two steps outlined in their extensive research and analysis report — Fintech Disruption Go-To-Market Toolkit — on how to determine and design a response strategy to industry disruption. They analyzed over 100 financial services and fintech companies and surveyed 1,500 consumers across banking and payments, insurance, and investments to identify which incumbent strategies can promote advantage.]
Bill Hortz: What was behind your decision to conduct research on finTech disruption for your financial services clients?
Stevin Lewis: Disruption is such an interesting topic and really, as we found out, pretty under-studied in how it relates to a go-to-market strategy. We found, for the most part, published research focuses on either investment and valuation or technology innovation. Rarely is attention paid to how incumbent firms — market leaders — should be addressing these disruptive challenges and securing their own advantage through sales and marketing activities. Our perspective is that while investing in innovation is imperative, this must be complemented with immediate go-to-market actions — whether that be improved customer experiences, clearer/bolder messaging, expanded/refined product offerings, etc.
Hortz: Why are you emphasizing “immediate response” in your research and toolkit?
Lewis: Financial services as an industry moves relatively slowly. Established firms must execute careful long-term innovation strategies across their organizations to innovate not only their products and services, but their entire organizational approach.
In the meantime, however, this wide window of disruption affords incumbent firms the opportunity to execute successful mitigation strategies across their business. We see an immediate need to enable firms to respond more quickly with differentiated advantages they have over disruptive entrants. We view this two-pronged approach as an imperative for incumbent success with regards to disruption and long-term value enablement.
Hortz: What are the primary forms that this disruptive innovation is taking?
Lewis: Rather than just looking at disruption as a function of technology innovation, we wanted our research to get at the true nature of what was going on. Disruption occurs when the customer value chain is altered. We were able to categorize and plot disruptive value on two primary axes: functional value directly related to the product or service (price, features, etc.), or emotional value related to the experience of shopping, purchasing or using the product or service.