‘Innovate or die’ is the oft-quoted phrase of Peter Drucker - the business management guru that predated Sinek and the recent crop of ‘Business Buddahs’ we now have to navigate on YouTube. Taken at face value the phrase certainly rings true; fail to innovate and you’ll be obsolete in a matter of years, months, or even days if the current trajectory of ‘Gen AI’ reaches full tilt.

However, for me those three simple words belie a whole mindset shift that needs to happen before true innovation can actually be created within an organisation. History has shown us time and again that recognising and actually implementing game-changing innovations can be surprisingly challenging, particularly when you're operating in a real-world, regulated business environment like the FinTech sector (FS).

From the Wright brothers' first flight to the advent of cloud computing, truly revolutionary ideas often face scepticism and resistance. Even when confronted with concrete evidence, both the public and industry experts can be slow to grasp the significance of groundbreaking innovation.

So, how can FinTech companies navigate this landscape and foster meaningful innovation? Let's explore five key strategies that can help your organisation stay ahead of ‘the curve’.

1. Upskilling Programmes: Nurturing Innovation from Within

The first approach involves investing in your most valuable asset: your people. By implementing comprehensive upskilling programmes, you can cultivate an innovation-driven culture throughout your organisation. This might include investing in internal universities, agile training, or large-scale certification programmes.

While this strategy tackles the innovation challenge head-on, be mindful of striking a balance. Focus on empowering and accelerating your top talent rather than expending excessive resources on bringing up the rear.

2. Innovation Hubs: Creating Space for Experimentation

Innovation hubs or labs provide a dedicated space for experimentation, separate from day-to-day operations. These environments can attract top talent and allow for the exploration of 'tomorrow' business problems with greater flexibility.

In a highly regulated sector like FinTech, these ‘sandbox’ environments keep innovation out of harm’s way too. At the end of the day, when delivering end-to-end transactions, FX and other complex financial procedures is your bread and butter, the last thing you need is the roll-out of an innovation laboratory in your live environment. As the ‘Oracle of Omaha’ himself said: “It takes 20 years to build a reputation and five minutes to ruin it.”    

As well as ensuring you operate a safe environment for innovation, you also need to think about how you can channel the fruits of your innovation teams back into the core business. My advice would be to prepare to overcome organisational resistance to change and find ways to cross-pollinate ideas effectively - that way you’ll take everyone on the journey with you, leaving no one behind. But remember, this may well be a painful process at first.

3. Start-up Studios: Building Tomorrow's Business Today

For a more direct approach to innovation, consider establishing a start-up studio. This involves creating multiple ventures within your corporate umbrella, each tackling different aspects of your value chain or exploring new business models.

While this strategy can be highly effective, it's crucial to strike a balance. Avoid alienating your core team by involving them in the innovation process, and resist the temptation to impose rigid corporate processes on these more agile ventures.

4. Incubators and Accelerators: Tapping into External Innovation

Incubators and accelerators allow you to engage with external start-ups, providing them with funding, mentoring, and resources. This approach can be an excellent way to de-risk failure and tap into fresh ideas from outside your organisation. At CreateFuture we can offer these types of services to ensure you stay on the right path - not only when it comes to innovation, but to actually produce something at the end of the process too.  

It’s little surprise - particularly in the current financial climate - that the challenge often lies in demonstrating tangible returns on investment, particularly in the short term. It's crucial to develop metrics that capture the long-term value of these engagements and communicate this effectively to core stakeholders.

5. Sense and Scan Capabilities: Keeping a Finger on the Pulse

Finally, establishing robust sense and scan capabilities allows you to passively monitor the FinTech landscape for emerging trends and potential partners. The buzz around AI enablement is perhaps a current example of a trend which many within the FinTech sector are most curious about, and are actively horizon scanning for when it comes to partnering.  

The beauty of this approach is that it requires minimal upfront investment and allows for targeted engagement when opportunities arise.

While this strategy can be attractive for its low-risk nature, be aware that it may leave you feeling less in control of your innovation agenda. It requires patience and a willingness to act decisively when the right opportunity presents itself.

Crafting Your Innovation Portfolio

The most successful innovators don't rely on a single approach—they spread their bets across multiple strategies. While tech giants like Google and Meta may have the resources to pursue all five strategies simultaneously, most organisations should aim to place bets in at least three areas.

Consider adopting a 70/20/10 investment rule: once you’ve identified the three best innovation strategies from the 5 above, spread your bets by allocating 70%, 20% and 10% to them.  

Remember, innovation is not a one-off project but an ongoing portfolio of initiatives. By diversifying your approach and maintaining a long-term perspective, you can create an innovation strategy that drives sustainable growth and keeps your FinTech company at the forefront of the industry.

In the ever-evolving world of FinTech, the ability to innovate effectively can make the difference between leading the pack and being left behind. By thoughtfully applying these five strategies, you can create an innovation ecosystem that propels your organisation forward, turning today's ideas into tomorrow's game-changing solutions.

To find out about how CreateFuture can help visit our Strategy and Innovation page.