Lessons from FinTech

Diversification and collaboration pave the way for progress

April 5, 2019

By Patricia Pop

Source: Institute for Co-operative Education (Co-op)

Fintech is a fascinating growing field, but it is somewhat misunderstood. Prior to attending the FinTech Forum in Montreal in late October, I would have explained fintech as tech applied to finance, and I would not have been wrong, but that definition somewhat misses the mark. As the diverse speakers at the conference demonstrated, fintech is more accurately defined as technological advancements applied to finance to democratize, simplify and propel forward the financial services industry.

One such major advancement is open banking: these two words were on everyone’s lips during the FinTech Forum. Conversations all seemed to come back to the same point: how do we create an environment of collaboration between the different players in Finance that would allow the sharing of data in a safe space? Given this challenge, diversity and collaboration were important themes present throughout the two-day conference; and these two themes are not to be taken lightly as they represent an important part of business and professional development.

Diversity requires promoting inclusivity and variety to achieve a mix of well-balanced viewpoints, backgrounds and skill-sets, which – when combined – are proven to improve performance and internal decision-making[1]. Beyond that, being exposed to varied points of view makes for more interesting conversations as seen at the FinTech Forum conference, where the panel discussions would not have been as interesting if all the speakers were clones of each other with identical backgrounds. In fact, the areas of concentration of the speakers were as varied as their topics of conversation, with one particular panel debating the merits of open banking bringing together a physicist, a historian, a developer, and a businesswoman, making for an enlightening conversation.

Students, Diversify!

As students in ever-evolving fields, we must find ways of remaining relevant in today’s workforce, and diversity might just be the key. When only about a third of students feel confident in their skills upon graduation, according to a 2017 Strada-Gallup poll[2], it is clear that something is missing from university curriculums across North America. Perhaps they are simply outdated, as an article in The Guardian suggests, stating that “many curriculums [..] are stuck in the past” (2014)[3]. Some universities have gotten the hint and have implemented internship programs for their students, such as Concordia’s Co-op Institute, which allow students the opportunity to gain invaluable skills and work experience before they even graduate.

Many employers, especially in start-up stage companies, claim they don’t look at grades, or give them very little importance – what makes viable and interesting candidates are their prior internships[4]. Although many students have gotten on the internship train, it might not be enough to fully prepare them for what is to come.

As the FinTech Forum proved, many good ideas exist to innovate in the financial services industry, but they do not come from – or at the very least are not implemented by – a group of people with commerce degrees; they are built by people from various fields who come together. Having different perspectives only improves the offerings of fintech.

In fact, by focusing too much on a small aspect of an otherwise large field, we tend to lose sight of the bigger picture, which is never good for the end-product. Students are guilty of zooming in too closely on their grades while neglecting the opportunities to acquire skills and knowledge that might not immediately seem relevant. In fact, that is the kind of knowledge that makes a well-rounded individual. Taking a class, for example, because it is rumoured to be an easy A instead of taking a class that genuinely interests them or that might seem only tangentially related to their field of study is a bad strategy in the long run.

Learning to code is an excellent example of a seemingly irrelevant skill for finance students, but a skill that has been proven to be valuable in the industry[5] as demonstrated by the growth of the fintech field. Learning a coding language is like learning any other language, it opens you up to a world of endless possibilities[6], and in this case increases your attractiveness to potential employers. A study carried out by CBC last month revealed that Canadian employers found students and recent-graduates lacked seriously in the areas of communication and problem solving[7]; two skills that learning to code helps develop[8], a reason for which it is being taught more and more in elementary schools[9].

Tear Down the Walls: Collaborate

Coming back to the central theme of this year’s FinTech conference, open banking presents a fantastic example of the power of collaboration. Open banking stems from open data which more or less means sharing data with everyone within the industry. This can be daunting for both consumers and industry titans, but it also offers opportunities for the advancement of financial services into a more collaborative era.

Many consumers are fearful as data breaches are not unheard of, and it can at times feel that every company we interact with online tries to milk us for as much data as possible. It is a scary concept for firms as well, as they must put their customers -who are mindful of the uses made of their data- first, thereby making open banking a difficult idea to implement.

However, instead of fearing the unknown and continuing to work in silos, a collaborative approach will benefit everyone. Sharing data means better prices for insurance policies, as well as better offerings that truly reflect the needs of consumers. It means smaller firms will have more power by being allowed to sit at the same table as the well-established firms, perhaps bringing forth innovative ideas that bigger firms just don’t have the flexibility to implement.

Whether or not fintech is of any interest to the reader, it holds many inspiring lessons for success. Even as a small and developing field, it has managed to garner the attention of the big players in the industry by bringing together people and putting to use diverse skill sets. Collaboration and diversity are two such key skills necessary for the development of FinTech, and one would argue necessary for personal development as well.