Fintech Innovation: Redefining Impact Beyond Financial Services
The fintech industry, known for its groundbreaking solutions in financial services, is evolving in interesting new directions.
Technologies initially developed to solve problems in financial services (esp. banking) are finding new applications in a variety of other sectors, showcasing their versatility and adaptability. Applying these solutions, and more importantly, the innovative approach to problem-solving that fintech firms are known for, is creating new opportunities. We’ve selected three distinct yet interconnected examples of this type of innovation, to showcase where fintech has expanded beyond its traditional boundaries:
Revolut has launched a new HR Technology platform: Revolut, primarily known as one of the first fully digital banks, has ventured into the realm of HR technology with "Revolut People." The company has harnessed its fintech expertise in creating great UX and managing complex data flows to address a universal business challenge: efficient and scalable HR management. From managing employee data and documents to streamlining time-off requests and performance reviews, the Revolut platform encapsulates everything HR in a single, seamless interface. This move by Revolut is an insightful example of how fintech's principles and technologies can be applied beyond traditional financial transactions, demonstrating the sector's versatility and potential to revolutionize various business functions.
Risk management reimagined - OakNorth’s COVID-19 Credit Framework: Back in 2020, at the height of the pandemic, OakNorth, another fintech innovator from the UK, developed their "COVID Vulnerability Rating" (CVR) Framework in partnership with PNC Bank in the USA. This framework was a response to the economic impacts of the COVID-19 pandemic. By integrating over 130 COVID-19 subsector scenarios, the CVR Framework offered a nuanced view of how the pandemic affected different industry sectors, enabling lenders like PNC to make more informed decisions. This framework was a fusion of traditional banking wisdom with cutting-edge fintech, highlighting the sector's capacity to adapt to and manage new types of risk.
IDMission’s Identity Verification for retail Point of Sale (POS) in sports venues: IDMission, known for its identity verification technology in the banking sector (especially for new account openings), adapted its leading-edge technology and expertise to apply it at retail POS systems in stadiums. The result was a technology that enhanced the security and efficiency of customer transactions in high-traffic stadium environments. The use of biometric verification combined with payment acceptance has enabled venues that need to check customer age before selling their products (e.g. sale of alcohol at a sporting event) to both meet their regulatory requirements and enhance customer experience at the same time.
Despite the differences in their applications, each story reflects a shared commitment to solving complex problems by taking solutions developed for (and proven in) one sector (i.e. banking) and applying them in another. This is one of the core capabilities of true innovation.
For professionals in financial services, fintech, and risk management, these developments offer valuable insights:
Firstly, they emphasize the need for continuous innovation and adaptability. The fintech sector's ability to expand into new areas like HR and retail POS systems demonstrates how the kind of agile problem solving pioneered by the sector can be profitably applied in many others.
Secondly, the integration of fintech solutions in risk management, as seen in OakNorth's CVR Framework, shows the potential for these technologies to make risk assessment more predictive, nuanced, and responsive to global challenges. This approach can significantly enhance the resilience and preparedness of financial institutions in the face of future crises.
Finally, the example of IDMission underscores the value of cross-industry thinking. Such cross-pollination can lead to innovative solutions that address complex challenges, driving growth and efficiency across multiple domains.
As we can see, the stories of Revolut, OakNorth, and IDMission are just the beginning. They paint a picture of a future where the lines between financial services, fintech, and other sectors become increasingly fluid, leading to a more interconnected and innovative business landscape. Embedded Finance is a great example of this. This is a future where the transformative power of fintech is not confined only to financial transactions but is a driving force for change and progress across the entire spectrum of business and society.
Would you like to know more about how we worked with companies like IDMission to help them unlock new markets for their existing technology? Click here to setup a 20-minute one-on-one call with the project lead, David Milligan.