Duncan Ash, Senior Director, Global Financial Services at Qlik

We’ve heard – and seen – it all before: Kodak replaced by Apple and other smartphones; Blockbuster taken down by Netflix; and Borders substituted by Amazon. The cautionary tale behind these scenarios is one that warns about the danger of not innovating regularly and in many cases it leads to  established companies hurriedly hiring Chief Digital Officers (or Chief Future Officers) and setting up Innovation Labs to try to take advantage of the digital transformation afoot.

 However, for many of these recognised brands, while it would be foolish not to watch closely what the competition is doing, there is often no need to jump on the bandwagon to create a new payments app or to match the latest robot offering wealth management advice.

For starters, many of the fintech start-ups – from Silicon Valley to Silicon Roundabout and beyond to Dublin and Berlin – are flourishing as they have spotted an opportunity. They have seen a gap in the market and have quickly and effectively built or coded a solution to offer to the buyer. This could be to the consumer directly, or in some cases it’s a B2B offering – driving financial services organisations so outsource an element of back office functionality.

 The chances are that the fintech operator has capitalised on technology or opportunities that didn’t previously exist – we need only look to Uber and Deliveroo to see how an algorithm can transform what was a highly established industry – to cater to an increasingly digital-first, always-connected millennial audience. And the fintech start-up probably did this very swiftly, given it doesn’t have the same legacy systems or decades of regulatory guidance to wade through compared to some of the major banks.

 All of this is to be applauded. As we evolve, and our technological capabilities advance, why not develop new solutions, apps and software that can provide a swifter or more digital banking experience?

 Well, many of the major heritage banks, despite their efforts to embrace innovation and foster a start-up mentality, view some of these fintech start-ups as a threat to their traditional operations. But, in my view, they needn’t always.

 They have a huge arsenal at their disposal that they can use and which fintechs will likely struggle to harness, even with time. Namely insights. Banks have complex sales operations, with multiple locations, channels, products, regulations, currencies, languages, and time zones, all of which generate a vast amount of information and data. It means they have a wealth of information and insight into their customers. Cutting through these complex data sets with data analysis technology to properly understand their customers gives banks a uniquely clear view on where their focus should be. The data they hold can show them where to scale up or cut back, and which customers to approach with which ideas, at the most appropriate time. This is data that fintechs will rarely have to hand – at least on such a scale.

 Where banks can learn from fintechs, however, is in the distribution of this information within the organisation. Our recent survey of 300 financial services executives on how they manage data showed that only about half of those surveyed understand who in their operations need what information to best do their jobs. In financial services in particular, the insights that come from the wealth of customer data rarely make it all the way through to those on the front line who deal with customers every day.

 By embracing a user-driven data analysis approach to gathering insights and delivery, banks can retain the upper hand compared to the smaller fintech start-ups. By improving the distribution of information to customers and employees, banks stand to build stronger relationships with the people that matter in times of disruption. Many are already recognising and capitalising on this, but there are plenty more who can turn their fintech fear into competitive advantage through the power of data analysis and insights sharing.