Why should we care about fintech companies?
It was a question raised by Sallus Retirement’s Lisa Kottler at the GRPAA 2022 Industry Leaders Summit in Carlsbad, California on Saturday.
“What they are especially good at it solving real problems …”
In 2016, Kottler watched a number of Ted Talks on YouTube about blockchain technology and was immediately hooked.
“It blew me away, and then I went back to the day-to-day and kept thinking about it,” she said. “Eventually, I left my job to get a master’s degree in technology communication. I went to conferences and built my network.”
Saying it’s critical we all pay attention to what’s happening with fintech, she noted that venture capitalists invested $140 billion into U.S.-based startups in the first half of 2021.
“Fintechs are small companies that are all about disruption,” Kottler added.
She mentioned Harvard Business School professor Clayton Christensen, who first identified the term in the 1990s. The Clayton Christensen Institute defines disruptive innovation as “a process by which a product or service initially takes root in simple applications at the bottom of a market—typically by being less expensive and more accessible—and then relentlessly moves upmarket, eventually displacing established competitors.”
So, what has she learned from her time studying fintech?
“They meet people where they are, meaning everything is mobile. What they are especially good at it solving real problems and knowing what the actual problem is.”
Entrenched players might build something they think is really cool, and then expect people to use it. But it shouldn’t be their problem that they’re trying to solve, but rather the customers.
“No wonder no one uses what the entrenched player built,” Kottler concluded. “As Christensen said, the point of going to the hardware store and buying a drill bit isn’t to simply get the drill bit. That isn’t the problem to solve, it’s drilling the two-inch hole.”
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
