New technologies are changing the way we live and following the World Economic Forum in Davos, the ‘fourth industrial revolution’ are the words on everyone’s lips. With the development of artificial intelligence, the Internet of Things, robotics, big data, and mobile telephony, fintech and IT businesses in the UK need to act quickly, smartly and efficiently to keep up with the latest innovations and technology.
The way big businesses within the fintech sector discover and implement innovation is shifting, with the launch of venture teams, accelerator panels and internal ‘incubators’ bringing a start-up mentality to corporate organisations. Organisations are embracing this concept of ‘intrapreneurship’, an entrepreneurial approach where teams and individuals are driving new venture ideas from within the organisation.
Intrapreneurship or corporate entrepreneurship has been adopted by some of the world’s most successful companies, such as 3M, GE, Intel and Xerox, for several years. It is a great approach to maintain relevance and keep the company agile, customer-centric and innovative. Only recently has this concept become widespread and openly embraced.
Intrapreneurship can be defined as an entrepreneurial activity within a large, established business, usually to address a new market opportunity or develop a new way of doing things, outside the normal scope of activities. Intrapreneurship is also a change of mindset – thinking like an entrepreneur: seeing new opportunities, being completely customer-driven, making the most of limited resources, and above all moving quickly.
Within many big businesses there are talented people with brilliant new ideas. The challenge is working out how to realise these opportunities and bring these ideas to life. Traditional financial institutions have been focused on risk, compliance and technology challenges and often struggle to change direction or embrace something new. This is where intrapreneurship comes in.
Fintech is more than an industry, it’s an ecosystem spanning travel, security, data, lending, retail, payments and many more sectors. So it’s important for players within this complex market to work together in collaboration.
With the development of new digital technology and business models, more and more people are becoming intrapreneurs. Employees tend to move around more often, so intrapreneurs are adept at landing in a company, making an impact immediately, delivering one or two big initiatives and then moving on to another company.
Fintech and IT companies are also more willing to collaborate and work in partnership than they used to, recognising that no one company can do everything itself. Organisations often look to acquire start-ups and SMEs to enhance their offering, but you can’t rely on acquisition alone for business growth. Acquisitions can be a great way to bring in new complementary capabilities and technology and can refresh the entrepreneurial spirit and culture within established companies – so a combination of intrapreneurship and acquisition can work well.
We’ve seen some great examples of innovation and intrapreneurship from companies such as Transferwise, the peer-to-peer money transfer business, as well as Crowdcube, the equity crowd funding platform.
bPay by Barclaycard disrupted the payments marketplace with the launch of its range of wearables for banking. The way consumers shop, bank and pay for items and manage their money is changing and Barclaycard is really leading they way in bringing exciting technology and innovation to banking, through intrapreneurship.
Aegon, a leading insurance and investments company, has applied the concept to develop a new consumer business Retiready – with the single-minded focus to get the UK ready for retirement.
Speed is key when it comes to intrapreneurship. These dedicated, purposeful teams can cut through the corporate layers that can often slow big companies down. There are other benefits to financial IT businesses, such as the ability to explore and experiment in new market areas before making a big financial commitment, and the impact on the wider workforce – intrapreneurial projects bring new energy and direction to a business.
We are witnessing an increase in the launch of venture teams, or internal ideas incubators, as well as in investment in research and prototype development. It’s essential for fintech and IT businesses to work collaboratively with experts in this field, listen to creative new ideas from all levels of the company and encourage a culture of change and innovation to facilitate commercial growth. The fourth digital revolution is upon us and so businesses should review their development strategies to ensure they stay ahead in this competitive marketplace.
Research shows that 28% of financial services companies are investing in innovation centres – showing an investment and interest in intrapreneurship. This is an encouraging figure but there’s certainly scope for more development within the fintech sector.
By Peter Sayburn, Co-founder and MD of Market Gravity.