This is the fifth in a seven-part series about selling technology and software into the financial markets sector.
In this blog, Colin Slight of The Realization Group, Matthew Cheung of ipushpull, Carl Rogers of Finceler8, Debbie Brown of Broadridge Financial Solutions and Alastair Rutherford of Ascendant Strategy look at the value – or otherwise – of being seen as a ‘disruptor’ to the industry.
In the financial sector, it seems that everyone these days wants to be a ‘disruptor’. But how disruptive should you purport to be, given that the financial markets technology landscape is highly complex? Any new solution will most likely need to coexist with existing systems and workflow, so is it wise for vendors to market themselves as disruptors?
Be an Innovator rather than a Disruptor
According to Matthew Cheung, CEO of ipushpull, a technology company that specialises in live data sharing and workflow automation, when dealing with larger enterprises, it is probably better to be seen as an innovator rather than a disruptor. “If you’re selling into a bank, your sales cycle can be years” he says. “When we started off, we weren’t necessarily being disruptive, but we were using a new technology that the banks hadn’t used yet. So it’s less about disrupting and more about innovating and enabling and integrating.”
The cloud has helped with that, says Cheung, because the banks are a lot more open to cloud-based solutions now. “You can really innovate around cloud-based services. That’s come on immensely in the last year, and the cloud adoption path is going to continue growing exponentially over the next couple of years. That’s just the way the industry’s going, it’s better, cheaper, faster. And it means that the whole ecosystem that can develop around it is going to become bigger and better as well, so it’s going to be even easier for a company in two, three years’ time to create something and then start selling it at an enterprise level.”
If someone’s making a career bet on a disruptor, that can be risky, so they’re going to need some reassurance that the actual solution they’re buying works and that the firm is going to be there for a reasonable length of time, says Carl Rogers, Director at Finceler8, a London-based fintech accelerator.
“People like new technology and innovation, but you need to be cognisant of the fact that the individual who’s making that purchase has got their own risks. If you’re pumping the ‘disruptor’ term too much, it can frighten a number of people off. As the old saying goes, nobody ever got sacked for buying IBM. And generally, firms would prefer to deal with fewer rather than more systems and vendors. They’d rather their existing suppliers provided them with the technology, but the fact is a lot of the innovation comes from smaller companies. So my advice to them is to focus on their solution and their customer, their target audience.”
Recognise the Need for Open Technology
Debbie Brown, Global VP Marketing Asset Management at Broadridge Financial Solutions, a financial services technology company, believes that firms don’t necessarily set out to be disruptive. “I think what they’re looking to do is to remove friction in the user experience, or in the workflow, so that things are more seamless and their customers gain more operational efficiency. In that context, if you’re a fintech firm developing technology that removes friction, helps to automate workflow, helps to improve efficiency, then whatever you’re doing is going to be better placed if it’s more of an open architecture-type solution, which is easily, seamlessly integrated into the technology stack. Firms don’t want to have to manage multiple points of risk. That’s a very real issue when you’re implementing all kinds of different technology, it introduces risk and complexity to the mix.”
Operational risk is always a concern, adds Brown. “Certainly, it’s been accelerated by the pandemic, because not only are things more complicated and there’s more risk, but you haven’t got the people physically around to be able to step in and handle potential breaks in the technology stack. People are now taking a long, hard look at that.”
Understand Your Client
Alastair Rutherford, Managing Director of Ascendant Strategy, a consultancy firm specialising in post-trade infrastructure transformation, suggests that although there is a general perception that banks resist innovation and disruption, the reality is actually quite different. “There’s a real appetite for it, but it’s just very difficult to do, particularly in post-trade. So you might start out with something quite disruptive, but by the time it is deployed within the existing infrastructure, it’s effectively been normalised in order to fit into the architecture. Vendors need to recognise that”.
“It’s about understanding the technology landscape of the market that you’re selling into, as well as the industry challenges,’ says Colin Slight, Co-Founder and Managing Director of The Realization Group, the specialist financial services and fintech marketing agency. “It’s also important to understand the commercial aspects, which is that you may disrupt in one area and save some money, but you may introduce cost somewhere else. So as a vendor, do you understand, from a financial planning and a budgetary perspective, how the value of your solution is going to be accounted for, versus spend that is happening elsewhere?”
Part six in this series will look at how vendors can leverage sales & marketing automation tools.
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