Overlooking the craft series (part 2): FinTech (payments)

Overlooking the craft series (part 2): FinTech (payments)

There is an exquisite element of art, passion and skill as we spend quality amount of time studying, practising and contributing in specific segments. Done intentionally, I call it "honing our craft(s)". Yet, compared to a specialised professional qualification or select areas in arts and culture, all other areas get overlooked. The more I dwell into my craft as a scientist, the more I must fine-tune my skills as an artist as well. I can't speak for all but mine, as I recount the stories, you might see something reflecting in yours. This a 3-part series.

Part 2 treads through the world of fintech and digital payments.

I initially hesitated on this portion, this is a popular space currently and many in my circle are part of this this space or by virtue of someone they know. And yet it remains important to me, to highlight some of the nuance and craft. We ignore it as a craft, and most inevitably, pull anything that vaguely is linked to a financial product or vaguely to anything technical as FinTech.

As a overall personal introduction or reference to an industry, generalisation works. Yet when we look at specific needs around talent, resources and expertise, that's when the crafters need to be sieved out of the mix.

I've had the mixed path of bank tech, financial ledgers and consulting, then networks and eCommerce and digital payments. All have been loosely termed FinTech. For personal research (because there hasn't been any corporate professional demand yet), my world of payments has evolved to digital assets, crypto, blockchain technology and utilities. (Remember: the explosion of interest in web3 seems like it's happened currently, but that is different from the study of usage in the payments world when blockchain technology and implications of crypto and their exchanges already started creating waves 5 - 6 years ago.)

(I'm not sure if you detected it yet, there is a subtle excitement I have with this arena, because I love how varied the world in FinTech is, while realising how many "species" exist in the industry alone.)

And back to the title: at which parts does honing your craft(s) get overlooked?

1. Can we simply say... the 'entire SDLC'*?

Digital payments have different requirements and considerations of the user requirements. Due to the nature of the transactions, which cross into payments or some form of money flow (credit, loans, cash, on behalf of, B2B or B2C, C2C, fiat, crypto, cross border, FX and cross border. And now the 'less older kids on the block', digital assets and conversion, BNPL etc.), there are a variety of compliance, regulatory and legal considerations per jurisdiction.

Requirements affect what gets instructed to be built. The developers have to understand the ecosystem to build something that can be used, matched back to the requirements and eventually effectively tested.

Shall I bring in the complexity of industries and sub-industries as well? Because...

Simple illustration:

• Where and how do you implement 3DS 2.0 and with which channels? How do you adapt quickly and scale with PCI DSS 4.0? Hosted pages, silent order pages, SDKs? (it seems simple but often a mismatch in the building process across many service providers, with respect to the expertise of their relevant architects).

2. Payments, especially technology of payments, have legacy versions

In this case, it isn't legacy the forward looking vision, but legacy, the infrastructures and ecosystem that has been around for a while. Different industries have their "history", which impacts the partnerships today.

Some stakeholders have their own speed or versions of development, which impacts the Go-To-Market (GTM) strategy, the sales execution and which parts of the development requires partnership.

Simple illustration:

• Certain "-Pays" require a string of stakeholders through the payment chain to be aligned and setup. When many were initial set up, different people across FinTech jumped in, some without payments experience. All this was fine, until I realised that different stakeholders on the same chain weren't entirely aligned on the type of data fields they need. General transactions can be smooth, but the bugs (then) would have appeared in the exception cases - like refunds - which is less common in onsite payments, but very common in online payments. The issue was fixed but the ones who didn't believe me or needed more convincing along the how payment journey chains, were interestingly those who hadn't joined in the Tech or the FinTech spaces before that.

3. Bank Tech and FinTech Payments as two genres do not often overlap

I know they are trying, but today, they are still cousins (or distant relatives) and not quite joined at the hip yet. I say that with no malice, as I have spent considerable time in both arenas and fully appreciate the complexity of both areas and where they sometimes interlock.

"Do not often" doesn't mean they do overlap sometimes, just not all the time. They were birthed through very different needs, histories and systems. They address different portions of their customer's needs. Mostly they work side-by-side, and very often either solution is white-labelled for the other in another solution.

Simple illustration:

• In most countries, regulations restrict the types of payment services that banks can do and the type of bank services that payment service providers can do. Without going into nuances (before the geek in me goes off on a tangent), the responsibilities and objectives of a bank different from that of a payments service provider. While both entities "transfer some form of money from point A to B", in this case, a rose by any other name is ... another object altogether.

4. As you hone your craft, further nuances occur

I guess you're never truly finished in your craft as a crafter. Within payments, I've drilled the nuance of online vs offline payments. Different customer touchpoints and channels, difference between e-channel vs multi-channel vs omni-channel operations. Even before we jump into digital assets, crypto currencies and the conversions with fiat, I take a step back to a very prevalent simple example.

Payment wallets and how they have evolved, meant different implementation and customer target segments. The rails they used, because were backend and hidden from the daily consumer, didn't make it easier for those who had to create the related ecosystem.

Simple illustration:

• C2C and C2B payments via a mobile number or identity number suddenly made payments so easy in Singapore (before that you had to setup the payee in the online banking system, which was a lot more cumbersome a process). Singapore is not unique. There are versions in different countries. How it's setup technically is different. Most consumers would not need to know that, but if you're a regional payments service provider, you would probably need to understand the nuances. This impacts everything from resources, technical requirements and build, expertise and even GTM and sales strategies.

The purpose of defining areas of crafting that gets overlooked is not to create segregation around who is better or not. It is to appreciate the areas that we choose or choose not to specialise in. By doing so, we can discern the various resources or partners to work with together based on expertise, and what is required to create synergies.

In some sense, this is my nod to the world of FinTech. When people tell me they are "in FinTech", I often ask "which part". This is not about word play. This is because I know there is more behind the layers, and it's important to know what are separate areas that we need to collaborate on or learn from. It helps those crafting their paths in the similar domains see more purpose in making choices and honing their craft(s), instead of one big umbrella.

(*SDLC as a frame of the various components to create a product, not as a confirmation that every fintech product must go through that framework.)

The 3-part series: Part 1 being The Marketing of B2B, social, digital, Part 3 in coaching (love and intimacy).

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Welcome to my journey and the stories I have lined up for you. And if that transforms your office, the people, your business just a little bit, I am grateful. Welcome to Undiluted.

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