The Critical Role Partnerships Play When Scaling Fintechs

Blog written by Greg Watts, CEO at Findr

Alongside raising investment, securing the right partnerships is critical for business survival.

Indeed, in a recent research report from PwC, over 75% of CEOs rated partnerships as important’ or critical’ to their success.

Yet with many partnerships taking months if not years to come to fruition, it’s no wonder that so many businesses fail ”“ and waste considerable resources ”“ in the process.

So why do so many fintechs struggle with what we call the partnership problem?

Here are some reasons:

• They haven’t identified the right target partners;
• Their approach is too generic;
• They haven’t spent sufficient time identifying key stakeholders;
• Their offering and content doesn’t resonate with target partners;
• They don’t spend enough time or resources in the right places generating awareness.

In this article for Fintech Scotland, we’ll explore why businesses struggle with the Partnership Problem and provide tools and tips to enhance your approach and accelerate your efforts.

Get focused

In theory, partnership development is a straightforward process.

However, many businesses often fail at the first hurdle ”“ which is to have a razor-sharp focus on targets.

For example, it’s quite common to hear that a fintech wants to create partnerships with all’ retailers or banks in a particular market, then expect their sales teams to hit the phones and secure meetings.

However, with finite resources, that approach often misses the mark.

Fintechs ”“ and indeed, all businesses ”“ need clear partnership criteria.

The criteria for each business will vary, but some questions to consider may include:

• Which verticals, sectors or categories do you want to focus on? Within those, what are the priorities and why?
• What are the characteristics of your target partners? For example, are they high frequency retailers such as coffee chains or do they boast high transaction values, such as luxury brands?
• How easily can you partner with them? For example, a Tier 1 retailer such as BP or Asda is likely to take more time to partner with than a smaller coffee chain. Given how important time to market is ”“ it can often take months if not years to partner with large businesses ”“ targeting smaller partners initially to create case studies that demonstrate the value of your proposition may be a more efficient strategy.

Once you’ve evaluated your target partners, assign weightings to provide focus on where to spend your time and resources.

Sharpen your door opening approach by creating buyer personas

How often have you received a cold, un-researched introductory note on LinkedIn or via email?

It’s remarkable that so many businesses don’t tailor their approaches, then wonder why they don’t receive a response.

In fact, if you haven’t met someone before, you have less than a 3% chance of securing a meeting with them (unless you’re on Findr of course – where we average 27%)

It’s imperative you know as much as you can about your target partners before you approach them ”“ or any resources used to try and engage them will simply be wasted.

To maximise your chances of getting a meeting with a target partner, you need to make assumptions about what they may be looking for to help you tailor your approach.

To do this, it helps to develop buyer personas from which you can create content that makes them want to engage with you.

As you create the personas, points to consider are:

• What problems do you fix?
• What benefits do you offer? How do these compare to other players or competitors?
• Why should they engage with you?
• What channels do they engage with? How can you reach them?
• Which events or forums do they attend?
• Who ”“ if anyone ”“ do they currently partner with? And, critically, why would you be a better partner?

Cluster them to create segments with common challenges and issues you can solve.

Ultimately, you need to articulate why they should engage with you.

Once the personas have been created, you can focus on your content plan, encompassing your website, social media feeds, thought leadership and other marketing efforts.

Make it a team effort

Too frequently, partnership development and lead generation are viewed as the sales team’s responsibility.

Yes, the role of a salesperson is to sell ”“ however, he or she must have the full support of the business behind them to generate leads. Without that, the effort is likely to fail.

At Findr, we believe that the entire organisation should be involved in generating business and creating partnerships ”“ albeit in different ways ”“ and that any efforts not focused on growing the business should be questioned.

Thinking of it in these terms can help galvanise and focus your resources.

Bringing it all together

Creating partnerships sounds easy. However, without the right planning and focus, the results may be disappointing.

Being ruthlessly clear on who you’re targeting and why they should engage with you ”“ and then creating content that resonates ”“ is the most effective approach to creating long term, valuable partnerships.

Photo by Savvas Stavrinos: https://www.pexels.com/photo/monochrome-photography-of-people-shaking-hands-814544/

Fintech ”“ never an overnight success

By Anthony Rafferty, CEO, Origo

At the beginning of 2022 everyone was breathing a sigh of relief as the worst of the two year pandemic appeared to be behind us. We looked ahead to 2022 as a year when we could get back to normal’ again.

A year on and the world is looking at a global recession, we have a war in Europe and in the UK, high inflation, rising interest rates, falling GDP and an austerity budget which will see many people and businesses pay more tax.

With the Bank of England’s warning of a two year recession ringing in our ears, there is plenty of negativity in the atmosphere.

Which is why I believe every company every year should look back on their achievements and celebrate their successes.

The tenets of success, certainly as I have found them in my many years in the financial services industry, are that it takes a lot of hard work and it takes time. “Overnight successes” are rarely ever that, but the cumulation of many hours of hard graft by a dedicated group of people, propelled by a vision, a passion for what they do and a resilience to make it work.

This is no better evidenced than in Fintech.

Origo has a long history of working collaboratively with the industry to deliver ground breaking technology. This includes the Origo Transfers Service, our current work to establish the pensions dashboard central digital architecture and our Origo Dashboard Connector, as well as Unipass Identity, Unipass Mailock, Unipass Letter of Authority and the Origo Integration Hub.

Every one of these are developments offering industry-wide benefits, helping to make the industry more streamlined and efficient, helping companies to achieve their ESG goals, as well as delivering better service to the end consumer.

Yet, despite the considerable efficiencies, cost savings and other benefits they bring to the industry, none of them have been overnight successes.

If we take the Origo Integration Hub as an example, it was launched in 2016 as a service for products providers, platforms and software houses in the savings and investment market.

We had spotted that we could help these participants achieve considerable efficiencies, cost, time and resource savings by doing away with the need to undertake resource heavy, time consuming and costly point-to-point integrations with the companies with which they needed to exchange data. Instead we built a centralised hub to which they could link once and then connect to any other user of the hub for key services such as investment valuations, bulk valuations, account opening, remuneration, transfer tracking and bulk transaction history.

It is a common-sense strategy for the industry, fulfilling the very real need for companies to be able to integrate with each other as quickly and as easily as possible. In addition, it meant the industry could become more efficient and competitive, as integrations did not depend on having deep pockets or a significant business case.

Genius, right? Everyone told us so and yet by August 2020, only 21 firms had joined the Hub.

There were plenty of good reasons for it, not least the incredible drain on resources, time and money caused at the start of the pandemic.

But having been in the market for 30+ years we were not fazed by this, as we know with projects of this kind it can take time for momentum to build. You often need your early adopters to demonstrate the benefits before the rest of the industry will come on board.

And this is what happened. As we go into early 2023, we will be looking at over 50 companies, including top industry names, who will be using the Origo Integration Hub, with others in the pipeline.

To achieve success, we have learned that along with the hours of hard graft, dedicated people, a vision, passion and resilience, it also helps to have a little patience.

So, as we head towards the end of the year, we are celebrating our successes, bit by bit and no matter how long they take to come to fruition. I recommend you do the same.

Why you can stay ahead of competition with the 4th generation of data-driven NoCode technology

You might have heard that Lowcode/Nocode are rising fast as one of the most promising enablers of the digitalization, especially with the pandemic situation urging all organisations, public or private sectors to release various apps fast to keep track of staff, customers monitoring as well as keep business running as normal. However, one can be easily confused by so many lowcode/nocode products in the market and not really sure what would really benefit his/her particular company. Let’s take a look at the evolution history of lowcode/nocode first.

Lowcode appeared on the horizon around 30 years ago along with the internet hype where we all had some kind of encounter with the 1st generation of lowcode, which provides pre-stored templates to drag and drop to create some websites without knowing how to do coding. That’s the very first generation of lowcode, we call template-driven, or form-driven lowcodes. Still today in the lowcode market, a majority (around 95%) of lowcodes are based on this mechanism, but this type of template-based lowcodes is not very flexible to change already-set templates and certainly not capable for enterprise-class software development which demands highly complex operational process and logic building. 

Then around 15 years ago came along a more advanced lowcode type called model-driven, today’s most dominant enterprise-class software development market is this type of lowcodes, as they brought along the model-building mechanism which enables much more complicated and sophisticated enterprise-class environment applications. These lowcodes represent the 2nd ”“ 3rd generation of lowcodes. 

However this kind of lowcodes also has a serious drawback, which is inflexibility caused by human-created modelling. As it requires highly skilled IT professionals to build the data modelling to enable front end applications, whenever, yes we all know how often it happens, the front end user requirement changes, or new business situation arises, or any changes happened on the business front, the already-built modelling cannot work with the new changes anymore. With no choice, it demands the backend modelling to be rebuilt. However, in the data model, each data is linked with a complex web of data in a multitude of tables in database, a small change will involve a huge amount of work to redo the whole modelling, which demands not only highly skilled IT staff but also someone familiar with the original modelling, which poses the greatest difficulty for most companies, not to mention time and money to invest in. Therefore, the 2nd-3rd generation of model-driven is not flexible enough to cope with today’s VUCA era with bigdata environment. 

When it comes to the 4th generation of data-driven NoCode technology, it takes a completely different and innovative approach to application development: leveraging integrated data sources from various operational IT systems and turn the data into data assets, it allows data to become highly intelligent and autonomous, can auto-detect relationship with data from heterogeneous data sources to create auto-data modelling, this automatic modelling by data themselves greatly eliminates the human intervention, reduced hefty skilled IT staff workload and ensures high level of flexibility, as the modelling can be broken down and rebuilt at any time- anywhere with front end requirement.

For data-driven NoCode, it also differentiates from lowcode in the aspect that Lowcode serves more target users of IT professionals by providing system generated coding for them to copy and paste into their programming, but Nocode removes the coding barrier once for all, that the users don’t have to know anything about coding and can drag and drop to build any workflow, analytical reports and applications according to their needs. This character means it allows not only non-IT business users to build their own bespoke workflow and applications they truly need and tend to use more frequently, but also can largely reduce the qualification for software developers for software vendors, reducing their personnel expense and therefore improve bottom line. On Average data-driven NoCode can deliver enterprise-class complex applications within 3-6 weeks with a handful of junior engineers, around 70% further lead time reduction from model-driven NoCode products, and even more from the traditional fully human coding (high code) software development lead time of 1-2 years. 

Till now you must be able to realize, how much faster time-to-market and time-to-cashflow the bigdata powered NoCode can bring to the customers, that’s why in many cases start-ups and scale-ups can attract VC investment much more easily with Nocode platform built in. 

Even with the IT skill barrier removed, it does not mean NoCode replaces the programmers. Instead, the programmers can be relieved from many hours of low-value-added mechanical coding work to focus on higher value-added business know-how and customer centric work, while delivering software and applications much faster, thus creating much more value for their companies. 

So to wrap it up, you can see quite clearly what values one can get from the 4th generation of data-driven NoCode technology:

1. Faster software development lead time (Average 3-6 weeks)
2. Reduced IT skills = reduced personnel cost
3. Great time-to-market and time-to-cashflow
4. Eliminated data silo problem due to bigdata platform foundation (this is very important feature which we will have a dedicated article to talk about it, stay tuned in)
5. Multi-party coordinated development as well as software building on-the-go with auto-modelling, what you see is what you get
6. Enterprise-class competency and real big-data capabilities
7. Highly improved profitability
8. Non-IT business user friendly, higher success rate of applications built

Written By Shan You, SVP / MD for Overseas at Smardaten Technologies

Photo by Christina Morillo: https://www.pexels.com/photo/person-using-silver-macbook-pro-1181467/

How can fintechs access non-dilutive funding?

Entrepreneurs experience a myriad of challenges when it comes to raising capital to fuel their growth, especially at the early stages of their business.

Startups and other SMEs can now access a range of non-dilutive funding solutions at key stages of growth, including R&D Advance funding, Grant Advance funding, and Revenue Advance funding. These are alternatives to equity capital that can provide fast-growing innovative businesses with access to growth capital affordably and quickly.

These funding options help businesses by supporting investment into research and development, bringing forward project delivery timelines and helping to manage project cash flow. They also provide flexibility to support strategic investment outcomes, generally. For example, companies are now looking to R&D funding to help extend cash runway, through fundraising activities (e.g. Series A), to support increased valuations and maintain founder ownership levels. 

In the UK, R&D advance funding continues to grow. With an estimated 85,900 R&D claims for the year ending March 2020 (an increase of 16% from the previous year) and expenditure on R&D performed by UK businesses also showing ~3.5% YOY growth, businesses are now recognising the valuable opportunity provided through this form of non-dilutive funding.

Globally there are c. USD 350bn of assets owned by companies that have previously been unrecognized by lenders which can now be used as collateral to lend securely. Advance funding is similar to accessing any type of loan ”“ it simply uses future tax credits, grant payments or revenue, as collateral.  

Blog article written by Hamish Gregory, Director Strategy & Operations at Fundsquire

Fundsquire will be at the Scotland Fintech Festival. If you’d like to chat to the team at the event as well as get a chance to attend panel and networking sessions hosted by Fundsquire at the event, register your interest here.

Photo by RODNAE Productions: https://www.pexels.com/photo/marketing-exit-technology-business-7413915/