From company-centric to customer-centric through innovation and smart partnering
Innovation is definitely a buzzword these days. Everyone seeks it, but what is it? Well, for one thing, it’s not a new concept. The endless stream of inventions over the centuries is what makes today’s innovations possible. Innovation is about improving things in ways that enable growth and create added value for customers, employees and the organisations themselves. Innovation also helps to keep organisations at the leading edge. Nowadays, customers tend to walk away from organisations far more quickly than they approach them. Customers have high expectations and are less brand-loyal. As a result, rather than competing on price, organisations now compete with their business models. Established companies are having to rethink their approach. Technology-based innovation has to be a high priority because if companies don’t innovate, its competitor will.
The Onguard FinTech Barometer 2018 shows that 14% of companies are looking out for developments in new technologies such as artificial intelligence (AI) and robotics. This is a good start, but being aware is only half the battle. Effective innovation requires companies to look beyond their own operations. Rather than adopting a company-centric approach, they need to place customers at the heart of the organisation, ensuring that ‘putting the customer first’ is more than just a platitude. As organisations can’t always do this on their own, forming partnerships with innovative startups is an effective solution. Startups are usually looking for partners that can introduce scale. Larger organisations that can help them scale their business model are often on the lookout for innovation. In short, smart partnering can generate huge potential for organisations.
A well-known example of successful collaboration between an established service provider and an innovative startup is the partnership between Rabobank and the investment app Peaks. Peaks is an app that makes it easy to set aside and invest (small amounts of) money. The accessibility of the app appeals to a young target group, one Rabobank had trouble reaching with its other investment products. This is a typical example of ‘corporate venturing’: the forming of strategic partnerships between companies at very different stages of maturity. According to the FinTech Barometer 2018, approximately 20% of organisations work in partnership with a financial technology, “fintech”, startup.
Platforms that make people smile
Fintech startups are increasingly attracting venture capital. The figures speak for themselves: in the first half of 2018, more than $57 billion was invested in fintech startups worldwide. That’s more than twice the amount invested in the second half of 2017. The trend is clear. One reason why fintech is taking off is because it meets customer needs. Customers are increasingly demanding and have higher expectations. Fintech companies attract (potential) customers by developing cutting-edge technology that provides specific services. Partnerships between established organisations and innovative startups result in strong platforms that make a difference by delivering superior customer experience.
The Order to Cash process – the process from the placement of an order to the payment of the invoice – is a good example. This process consists of a series of sub-processes performed by different parties. The organisations involved can perform these processes separately. However, by joining forces and offering the whole process on one platform, they put the customer first and provide outstanding service. An organisation’s ability to meet customer needs in an innovative way ultimately increases customer satisfaction and retention – which is what a company wants.