Striking Balance
Looking for capabilities to solve customer challenges & problems may throw you off balance -- or at least out of your comfort zone. But you might find a new gem - in Wichita or Uruguay.
Photo by Eugene Lim on Unsplash
There are always a couple of weeks in September or early October that unbalance me a little. Fall just started in the Northern Hemisphere. It is the time of my faith’s Fall holy days. Smack in the middle of the first 2 holy days are the anniversaries of my mother’s and my kids’ father’s deaths. These Jewish holy days and anniversaries force me to think deeply about the cycle of life. I am drawn to the big questions: How can I live my life with integrity, dignity, compassion, empathy? How do I balance the need to make a living with the need to share quiet moments with a child or with myself? How do I balance my desire to make the world better with the demands of managing daily life? How do I balance these questions with the larger questions and issues facing my neighborhood, my state, my country, the world? How do I balance these days, questions, anniversaries, with developing the new thoughts ideas that are still percolating and making dinner every evening?
Fintech outside the hubs
In this newsletter, I have tended to stay away from recapping fintech news. There are plenty of great newsletters that cover that. But this week, I want to take closer look at a couple of fintechs outside of the well-known fintech/startup hubs like Silicon Valley, New York, London, Mumbai, Hong Kong, Tel Aviv. In my digital travels, I always marvel at finding startups in often overlooked places in the US Midwest and elsewhere. Looking in these “flyover” cities, I find lots of ideas and innovation percolating to solve all kinds of banking challenges and problems. This week, I took a stopped in the US state of Kansas and Uruguay.
Wichita, Kansas
In Wichita, Kansas Nxtstage holds a pilot competition for startups in fintech, community health and industry 4.0 – which aims to bring AI, analytics and more digitalization into manufacturing processes and supply chains. The winners of these competitions win pilot projects with related companies. The winner of the 2020 fintech competition was Griffin, a startup that uses geofencing and other data to improve customer engagement. Griffin’s founder and CEO is Donald Hawkins. (You probably weren’t expecting diversity in Wichita) Geofencing isn’t just location-based data:
A geofence is a virtual fence or a perimeter around a physical location. Geofencing is a tool to connect the virtual experience with the offline world’s physical location. When an object enters this area, something happens. Easy way to think about it a fence around your home. When someone enters your yard, the burglar alarm is activated. What should happen in such circumstance? You probably want to send an alarm to the security company? Send an SMS to you? Start the burglar alarm?
Typically, the geofencing use cases are not that brutal. Geofencing is a term that can be used in many different contexts, but the most popular one is the ability to detect a phone entering the area, and triggering something either in the device itself – or somewhere externally.
Unlike many fintechs, Griffin can be used for both retail and commercial banking customer engagement. For example, for retail banks, Griffin has identified a use case for using geographic data to identify customers who go to car dealerships. For commercial bank customers, Griffin can be used “to geofence commercial properties for sale and retarget prospective buyers when they view the property.”
As winner of the competition, Griffin won pilot projects with Emprise Bank, Fidelity Bank, and Intrust Bank. If these pilots are successful, Griffin becomes more attractive to potential digital banking vendor partners and bank customers.
In case you’re curious, Witchita - and Kansas - has a lot more going on. Wichita Technology has been around since 1994 providing seed funding to startups. Kansas City is another Kansas startup hub.
Uruguay
A recent unicorn fintech has emerged in Uruguay. Uruguay? Yup. With a $200 million investment, dlocal a cross-border payment platform, has a valuation just over $1 billion. Why should digital banking vendors and banks pay attention to dlocal? Unlike other payments platforms that focus on person-to-person payments, dlocal focuses on enabling the payments process between merchants from established markets, such as Amazon, Shopify and Nike, and customers in emerging markets. The platform supports a variety of payment methods from digital wallets to cash. Banks and other providers that support remittances should watch this platform. Just as Fundbox has, I expect dlocal will extend its capabilities to adjacent and logical services for both merchants and customers. I bet some of those services will involve banking. Embedded banking services will make that all the more possible. And this will make dlocal all the more valuable to their customers on both sides of the payment transaction.
Takeaways
Sure, lots of innovation and fintechs are thriving in all the tech hubs worldwide. There’s a reason for it. But don’t write off smaller cities as a source of innovation.
Digital banking vendors – or banks – based outside of the largest cities and tech hubs who are looking to build their fintech ecosystem can often find partners close by.
On the other hand, looking farther afield, outside your state, region or country can reveal fintechs that might also meet your needs for differentiating capabilities – or for helping your bank customer uncover hidden tribes.
Stay focused on your goal of identifying capabilities that enable you to help your banks uncover hidden tribes and create new products for them. This will enable you to keep your eyes open to the fintechs that help you achieve these goals.
Similarly, for banks this means not restricting your choices to the ones you’ve always known, but focusing on the digital banking vendors that can help you achieve your goals. Focusing on goals will be uncomfortable but may yield unexpected results.
Who publishes this newsletter?
I’m a former Gartner analyst, now an independent analyst & consultant. I’ve worked in and covered the banking industry for 27 years. I think & write about digital banking — but also indulge my other interests, women in tech, startups - especially those in the US Midwest & South Eastern Europe), leadership & change, and AgTech.
I write this newsletter for people and companies who are trying to differentiate their banking software in an increasingly competitive market. That could be people who work at software companies currently developing banking software or people at vendors that want to move vertically into the banking market. It’s also for bankers and investors who want to know more about digital banking transformation strategies & the technologies that power them.
I publish weekly. For now, this newsletter is free.
I can help your business– Need the ear and advice of an experienced strategist & analyst? Entering the bank market and want to understand your competitors? Feedback on your sales or marketing approach? Technology analysis for acquisitions? Want to get the attention of the right analysts?
Brief me on your solution/fintech/API/platform.
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