Evolution Not Revolution: What’s Wrong With Disruption?

While many FinTechs frame themselves as ‘disruptors’ or ‘challengers’ in a bid to rock the boat and confront the status quo, I often wonder whether this is the right approach?

As technology-backed startups continue to enrich the marketplace with streamlined processes, cost-saving tools, and enhanced customer experiences, I’m interested in how brands can best position themselves to take on established competitors, without bringing down the system altogether.

What is disruptive innovation? And why are we using it in the context of fintech marketing?

What’s My Problem With ‘Disruption’?

The word ‘disruption’ is unapologetically aggressive and consistently crops up in any startup’s vocabulary. While ‘disruption’ must work to some extent, eventually the disruptors will always naturally want to become the norm.

While it’s easy to chastise the big banks for their lack of innovation, the bottom line is people trust banks, and we’re willing to gamble our life savings on them. With this in mind, I believe FinTechs should think twice before trying to reinvent the wheel or revolt against the establishment.

I like to think of FinTechs as progressive agents for change that embrace technology-backed solutions to help the industry blossom.

While it’s important to remain ambitious and set your sights on scaling your business to compete with established organisations, creating positive change and developing a progressive solution that brings purpose to the ecosystem is a long-term goal.

Instead of trying to break down the big banks, the best ‘challenger’ banks and fintech solutions aim to create complementary services and products that can coexist with existing systems.

Ironically, the FinTechs who do choose to paint themselves as ‘disruptors’ will face a catch-22 if they manage to overthrow the big banks. If their products or services become the status quo, how will they continue to brand themselves as a revolutionary force?

These brands could experience an identity crisis along the way.

Be Different, Not Disruptive

For me, the focus for startups should be all about embracing the need for change. The best technology startups will identify a nuance to help them stand out from the crowd and offer customers something their competitors can’t.

The ability to use technology to streamline outdated processes and find cost-effective solutions for hyper-specific problems gives FinTechs a distinct advantage over a ‘jack of all trades’ bank. Fintech CMOs should position themselves as progressive changemakers who are working to build a fairer financial system that solves customer pain points and improves accessibility to financial services.

Whether it’s using API-driven automation to streamline outdated processes or delivering lightning-fast banking via a mobile app, FinTechs provide a world of opportunities to enhance customer experiences and resolve the hidden inefficiencies of established financial institutions.

Being Different Is Not About Being an Alternative to the Norm

At the risk of sounding like a fashion designer from the noughties, it’s important to understand the difference between ‘individuality’ and being ‘alternative’.

The biggest challenge for FinTechs is finding unique ways to solve customer problems, as opposed to simply replicating existing solutions in a different way. Embracing individuality is key to help your brand stand out from the crowd and differentiate your services as a valuable addition to the world of finance.

FinTechs should market themselves as credible and fundamentally different solutions to important problems. Focusing on reliability, trustworthiness and scalability at the infrastructural layer is vital to proving your worth.

Being different is about solving challenges and opportunities to make those aware of new possibilities. Case in point: Salesforce’s pioneering work on the fifth industrial revolution is a prime example of how an organisation can inspire change and challenge customers to imagine new horizons. Marc Benioff, Chairman and CEO of Salesforce, calls for a “new capitalism” where “businesses and executives value purpose alongside profit” to nurture the societies of tomorrow.

A Combined Force For Change

My biggest issue with ‘disruption’ is the idea of individual FinTechs competing in the same space to chip away at established institutions. As I mentioned earlier, the best FinTechs serve a clear and unique purpose by providing valuable solutions for highly-specific problems.

Surely the financial sector should grow in harmony? FinTechs can coexist to create a toolbox of specialised solutions that support one another in building a reliable and fair financial system.

I love brands like Airtable who can identify a unique opportunity in what looks like a saturated and impenetrable market. While it would be almost impossible to dethrone Excel and Google sheets as the king and queen of spreadsheets, Airtable established themselves as a valuable tool to support these existing systems and provide a valuable resource to an ever-growing audience of users.

The fintech world can learn from brands like Airtable by using technology to identify and solve specific pain points. The take-home message is to build products and services that add to the financial services market to enhance customer experiences.

Despite fierce competition in financial services, FinTechs have a real opportunity to model and sell themselves as the user-driven operators. 

They are agile, technologically savvy and able to bring laser focus to specific services. This means they can quickly shape products to meet user demands. 

This is a huge differentiator in a market where users have traditionally been forced to use the financial services that had already been built for them, rather than dictating what they needed from companies that could genuinely satisfy those needs while they were still relevant. 

Evolution, Not Revolution

As the history books tell us, paradigm shifts don’t happen overnight.

If we rewind to the early days of Amazon Web Services (AWS) in 2006, nobody could have imagined that an on-demand cloud computing platform provider would grow into a $500+ billion empire that sets the standard for modern computing.

Here at Modulr, we want FinTechs to serve as real industry-wide solutions that empower businesses with faster, easier and more reliable payment services. I see the future of finance as a collaborative effort between emerging FinTechs and established institutions to evolve outdated processes.

There are exciting opportunities for industry-wide partnerships and healthy competition between rivals to fuel a vibrant ecosystem of changemakers. Cutting-edge Payments-as-a-Service providers, like Modulr, offer a toolbox of customer-orientated solutions and powerful alternatives to enhance customer experiences.

The important thing is to be different.

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