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Measuring Innovation Pace in FinTech - October 2019

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Innovation is a race. 37% of banks in Germany viewed
fintech as a possible threat.
In the financial service industry, legacy organizations and emerging fintech disruptors are competing in the same environment, for the same customers.

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Measuring Innovation Pace in FinTech - October 2019

  1. 1. INNOVATION PACE IN FINTECH. 04.10.2019
  2. 2. • Innovation is a race toward customer relevance. • The competition is racing on high speed. • Benchmark your innovation pace with your competition. • Appendix • Revolut & N26 Customer Value Canvases • Revolut & N26 Feature Roll-out Timelines AGENDA. 2
  3. 3. 3 In the financial service industry, legacy organisations and emerging fintech disruptors are competing in the same environment, for the same customers. 37% of banks in Germany viewed fintech as a possible threat. CONTEXT.. Innovation is a race. Source: Statista 2016
  4. 4. With diverse competitors in the industries, different measures, methods, and strategies are taken, trying to compete. !4 CONTEXT. Partnership and Ecosystem leverages the diversity of competition in the market and aims to create more value for the customer to stay competitive. Open/ Multi- banking is a common strategy among smaller, fast- moving fintech companies, in order to disrupt the system and have a chance with the marketshare. Digitalization is still till this day the most critical transformation for the majority of legacy financial service organisations, in order to compete and stay relevant.
  5. 5. No matter how much the starting points or strategies of the companies differ from one another, there is one similar goal for all companies … Customer relevance !5 CONTEXT.
  6. 6. 6 THE COMPETITION IS RACING ON HIGH SPEED.
  7. 7. 7 To better understand the benchmark and their effort on innovation towards customer relevance, we examined the features/ improvement roll-out plans of N26 and Revolut from the past 12 months. * Revolut: Oct 2017- Mar 2019, N26: May 2017- Mar 2019 BENCHMARK.
  8. 8. 8 Based on the customer value canvas, a holistic view for all consumer relevant proposition of the product, large and small customer-facing innovations of N26 and Revolut in the past 18 months can be quantified and categorized. Core product functionalities and features required for the said fintech company’s pre-paid debit card offerings and online banking. Additional services that amplify the impact and capabilities of the said fintech company’s core banking products. How the said fintech company communicates its value proposition, educates and engages with its customers. CORE PRODUCT ADDED VALUE SERVICES COMMUNICATION & CONTENT CUSTOMER EXPERIENCE Additional features, services and integration provided by the said fintech company to enable easy-use and greater adoption of products. CUSTOMER VALUE PROPOSITION BENCHMARK. Examples of customer value canvas of N26 and Revolut can be found in appendix
  9. 9. 9Source: N26 Blog (2019), Revolut Blog (2019) The Result: N26 and Revolut are innovating on high-speed. 2.4 on average… Consumer-facing innovations are rolled-out each month. BENCHMARK.
  10. 10. 10Source: N26 Blog (2019), Revolut Blog (2019), Bank Cler Zak Online Presence Moreover, the innovation effort is focused on customer relevance. 0.5 Core Product & Added Value Improvements per month 1.0 CX & Communication/ Content Improvements per month 1.5 Core Product & Added Value Improvements per month 1.7 CX & Communication/ Content Improvements per month 1.5 total customer-relevant innovation per month 3.2 total customer-relevant innovation per month BENCHMARK.
  11. 11. 11 Innovation in the financial service industry is a race towards customer relevance. In order to stay ahead of the race, companies need to… 11
  12. 12. 12 Benchmark the innovation pace with the competition
  13. 13. 1. Calculate and examine your current innovation pace and innovation effort focus. !13 NEXT STEPS. Where do you stand in the race? Assessment and acknowledge is the crucial first step for any effective strategy and organisational change. Calculate the current innovation pace together with the product development team, and use the customer value canvas to examine where the innovation effort is focusing on. Core product functionalities and features required for the said fintech company’s pre-paid debit card offerings and online banking. Additional services that amplify the impact and capabilities of the said fintech company’s core banking products. How the said fintech company communicates its value proposition, educates and engages with its customers. CORE PRODUCT ADDED VALUE SERVICES COMMUNICATION & CONTENT CUSTOMER EXPERIENCE Additional features, services and integration provided by the said fintech company to enable easy-use and greater adoption of products. CUSTOMER VALUE PROPOSITION Customer Value Proposition
  14. 14. 2. Explore and analyze your existing resources, processes, and structure for improvement. !14 NEXT STEPS. Do you need to benchmark the pace? Could you do it? Exploration and analyzation within your existing resources is the second critical step to efficient and meaningful strategy. Based on where you currently stand in the competition, determine where you want to go, and examine not only the human resources accordingly, but also the relevant structure, process, KPIs, etc. KEEP DOING: Something that the team is doing well and recognizes the value of it: e.g. frequent collaboration and brainstorming as a team MORE OF: Something already being done and you believe will bring more value if done even more: e.g. splitting work into sub teams, more frequent interaction with the Product Owner LESS OF: Something already being done with some value but you would rather reduce it for greater efficiency: e.g. some stories were very good but too big and should have been split into smaller stories   START DOING: A new idea or something that you have seen working before that you would like to bring to the table: e.g. make more time for cross-team knowledge transfer and inspiration STOP DOING: Something that is not bringing value or worse, is getting in the way: e.g. depending on third party suppliers to recruits users for testing because it took too long Starfish Mapping
  15. 15. 3. Restructure and implement the necessary change in the agile way. !15 NEXT STEPS. What is the best way to implement change? Reconstruction and implementation might be the most challenging, yet rewarding step toward an improved innovation pace. Implementing the necessary organizational changes in the agile way will allow the team to quickly learn, adapt, and try again— making innovation the usual business. Agile Sprint Guide
  16. 16. SCHEDULE TODAY STEFAN ERSCHWENDNER Managing Partner +49 151 6462 0729 se@lhbs.com !16 Let us help. A marketing & innovation firm, we work primarily with legacy organizations to adapt their customer value proposition to meet emerging customer expectations. Together with our clients we discover business opportunities and deliver integrated customer offers for products, services, experiences and communication. Explore further on our website, and discover more industry insight reports, and get your free agile sprint guide.
  17. 17. UNLEASH YOUR POTENTIAL. Start exploring how you can carve your own future, please get in touch with us.

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