The influence of Fintech is undeniable. It's a hard pill for traditional banks to swallow but here it is: Fintech is here, and it's not waiting for anyone. For bankers, making sense and using the latest technology requires a robust strategic approach. Innovation has made it's mark on the finance and banking world, so traditional banking is facing a shake up like never before. Let's distill five essential lessons to help bankers out to prepare for 2024:

1. Embrace the Disruption or Drown

Understand that Fintech is not the enemy. Embracing innovation will keep you relevant and your customers happy. Gone are the days when banking was synonymous with paperwork and long queues. According to McKinsey & Company, as of July 2023, publicly traded fintechs had a market capitalisation of $550 billion, a two-fold increase from 2019. There were over 272 fintech unicorns with a combined valuation of $936 billion, a seven-fold increase from five years ago. Fintech is rewriting the rules, offering seamless digital experiences and lightning fast transactions.

2. Think Like a Startup, Act Like a Pro

Borrow a page from the startup playbook. If you have a culture of innovation within your bank, you'll be encouraging your team to think outside the box, experiment with new technologies, and be unafraid of failure. It's like what I always instil in my team and teach my clients, win fast but fail faster. McKinsey and Companies research found that funding for B2B fintech segments was more resilient than B2C, with smaller funding declines. Verticals such as BaaS and embedded finance, as well as SME and corporate value-added services, showed the least funding decline. This means that the traditional 'this is how we've always done it' won't cut it anymore. Fintech firms are nimble, agile, and think like startups.

3. Customer-Centricity Is Non-Negotiable

Fintech's secret? Customer centricity. Despite challenges, the fintech industry is expected to grow almost three times faster than traditional banking between 2023 and 2028, as mentioned in McKinsey and Co research. They have also found that revenues in the fintech industry are projected to grow at a 15% annual rate over the next five years. Fintech is giving customers unparalleled personalisation and control. It's time to put customers at the heart of everything you do. Understand their needs, preferences, and pain points. Use this technology to create personalised, frictionless experiences.

4. Data Is Your Superpower, Wield It Wisely

Leverage your data intelligently. Invest in robust analytics to understand customer behaviour, predict trends, and mitigate risks. There's no doubt that with great data comes great responsibility, so ensure that your data practices are not just compliant but also ethical. This means putting your trust in the currency of the future. Even fintech SME's must continue to innovate to retain their competitive advantage, with technologies like generative AI. Will your bank be able to play catch up if they're already catching up with their advanced, existing technology?

5. Collaborate or Fade Away

Here's the final lesson, break down silos and forge strategic alliances. Whether it's with startups, tech giants, or even other banks, collaboration is the key to staying ahead of the curve. Fintechs are transitioning from hyper growth to sustainable growth, emphasising profitability over rapid expansion.

In conclusion, Fintech should be a call to action for bankers. It's not a death sentence, if (and only if) you're willing to embrace and adapt to disruptive methodologies, be as agile as a startup, prioritise customers, master data, and collaborate. As a banker, you'll not only survive but excel in this new financial future. That future belongs only to those who innovate and dare to take calculated risks. Do you understand your role in shaping it?

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