The Finterview - Fintech Exposed episode 22.
In the realm of fintech, the blend of business acumen and technological innovation takes centre stage. This ever-evolving industry, shaping the finance landscape, presents unique challenges and opportunities.
At the heart of this transformation stands Jas Shah, a pivotal figure with notable roles at Citibank, Schroders, and Fidelity. His journey, combining technical prowess and business insight, currently focuses on assisting financial institutions and startups.
In a recent interview with Alistair Cotton on The Finterview podcast, Jas explores the product development life cycle, dissecting variations across business sizes. Additionally, we spotlight a prime example of effective fintech development: TransferWise. Jas shares insights on initiating ventures, thriving in a competitive market, sustaining growth for niche fintechs, and managing customer feedback.
Keep reading for the key takeaways from the episode or 🎧 listen to the full podcast here.
Jas Shah's journey
Jas Shah's story starts with a computer science degree, completed in the challenging climate of 2008's financial crisis. Initially, Jas worked as an engineer, writing code for traders and fund managers. However, he soon realised that coding alone wasn't fulfilling for him.
This realisation led him to join Citibank's graduate scheme, where he found a balance between business and technology. Here, Jas wasn't just coding; he was also interacting with end users, like those on the credit trading desk, to solve real-world problems. This experience marked the beginning of his journey in fintech. Moving through various roles at Schroders and Fidelity, Jas honed his product analysis and management skills.
In 2019, he took a significant step, leaving his corporate role to assist financial services institutions, entrepreneurs, and early-stage founders in building products.
Understanding the Fintech product development life cycle
Jas explains that the product development life cycle is crucial for bringing innovative ideas to market. It begins with ideation and discovery, where an idea is formed, and initial research is conducted.
The next stage is design, which goes beyond creating wireframes and UX. It includes developing a roadmap, defining MVPs, and planning for future development.
Building the product follows implementing the design and roadmap. This stage often requires revisiting and adjusting the design based on new insights.
Launch is a critical phase involving comprehensive communication strategies and community engagement. It's about making the product available and maintaining engagement and interest.
Post-launch, the focus shifts to growth, expanding the customer base, and refining the product based on user feedback. Finally, scaling involves sustainable growth, expanding the business without proportional increases in funding.
This life cycle is a dynamic process essential for successful development, balancing creativity, strategy, and practical implementation.
The journey through the stages of development is dynamic and varies with the size of the business.
In traditional models, like the waterfall method, each stage of development follows a linear and structured approach, similar to progressing through levels in a game. Requirements are defined and signed off before moving to the next phase.
However, contemporary approaches are more iterative and fluid, especially in smaller or early-stage companies. Discovery, design, and build phases often overlap, allowing for ongoing adjustments and evolution. This agile method supports quick adaptation to new findings and market needs.
This evolution in development methodology reflects the changing needs and constraints of a business as it scales. While smaller companies can be more flexible and responsive, larger organisations must balance innovation with stability and shareholder expectations.
Example of effective development: TransferWise
According to Jas, a prime example of successful Fintech development is TransferWise (now WISE). The company started from a simple yet common problem: two consultants, one paid in GBP and the other in euros, needed to exchange currencies without excessive fees. This led to the idea of peer-to-peer lending.
Their approach to product development was organic yet methodical, incorporating creative chaos. They began with discovery, asking questions and understanding the broader problem faced by many, not just themselves.
This was followed by designing and building a Minimum Viable Product (MVP), launching it, and continuously revising and improving it.
TransferWise's growth is notable, with over 10 billion in transfers and a mission to save a billion in fees. Their clear mission of making currency exchange fair and fee-free guided each development phase, allowing them to prioritise effectively. However, as TransferWise adds more features, it faces challenges similar to traditional banks—balancing customer experience with an increasing range of products.
The transition from a simple product to a complex, banking-like suite illustrates the evolutionary nature of development and the challenges of scalability and user experience.
Starting Fintech ventures: timing and vision
Jas advises that planning for ventures should begin on day one. The initial phase should include discovery and ideation, even before building the product or team formation. This approach prevents the challenges of retrofitting processes into an already developed product, akin to modifying a house's blueprint mid-construction.
Successful startups often have a clear mission or vision from the outset, guiding them through the development process. This vision helps in identifying the problem to solve but leaves room for flexibility in the approach to solving it. Rigid roadmaps can be limiting, whereas a clear but adaptable vision allows for innovation and responsiveness to market needs.
For instance, a mission like reducing fees can evolve to encompass broader areas, such as cross-border investing, highlighting the importance of a well-defined yet adaptable mission. This approach enables Fintechs to explore solutions based on real-world feedback while staying true to their core objectives.
Standing out in the market
Jas emphasises that differentiation is crucial in the current competitive Fintech landscape. The best approach to standing out is engaging with customers to understand diverse needs and preferences. Not everyone seeks the same features or services, just as people have varied tastes in cars, phones, or even football teams. This diversity offers fintechs opportunities to distinguish themselves either by targeting different customer segments or by offering unique features.
For instance, many neobanks share similar features but differentiate by focusing on specific customer segments and using branding to appeal to their target audience. On the other hand, platforms like Revolut aim to become 'super apps,' offering a broad range of services to appeal to a wider customer base.
Moreover, banks face challenges in personalising experiences for millions of customers. Creating a product that caters to a vast and diverse user base is complex. Banks struggle to balance the need for a consistent user interface with the demand for personalised customer experiences. This issue is an area where newer ventures can capitalise by offering tailored solutions that larger banks may not provide.
Sustainable growth for niche Fintech
Jas advises that value propositions aimed at niche markets with a limited customer base should prioritise sustainable growth. The key lies in continuous discovery and understanding evolving customer needs. Even after launching a product, returning to the discovery phase helps identify additional problems or areas for improvement.
The approach involves a cycle of design, build, and launch, constantly iterating based on customer feedback. It's not about strictly following customer demands, but about blending their insights with the expertise of the team. This process is crucial for both adding new features and refining existing ones.
Analytics play a significant role in understanding product usage. However, qualitative research and regular customer interaction are equally important. Engaging with customers across various stages, not just during problems, provides a balanced view of their experience and needs.
Incorporating customer feedback into the development process, possibly through a dedicated customer success team, ensures the product remains relevant and valuable. This approach leads to a roadmap that aligns with the company's mission while adapting to customer needs and market changes.
Balancing customer feedback
Jas points out that while listening to customers is essential, it's also important to take the wider context into account. A common mistake is building features based solely on customer requests, like loan products, without considering the company's infrastructure and mission.
Diverse customer voices provide a more accurate picture of needs and preferences. Speaking with a limited number of customers can lead to skewed or niche demands. Successful fintechs often use customer feedback to guide development while maintaining their core mission and vision.
For B2C products, regular customer interaction and feedback are essential. However, in B2B, customer feedback takes different forms, often involving partnerships or business development teams. B2B businesses may prioritise client requests based on revenue potential or strategic importance.
Ultimately, whether B2C or B2B, the key lies in maintaining a balance: listening to customer needs while aligning with the company's long-term goals and capabilities. This approach ensures sustainable and strategic product development.
Navigating B2B dynamics
Companies must balance between accommodating specific customer requests and staying true to their product vision.
Successful fintechs like Marketer and Thread have demonstrated the importance of pushback in customer interactions. They manage customer expectations by providing clear explanations for why certain requests may not align with their mission or are not feasible at the moment. This approach maintains a healthy client relationship and respects the fintech's expertise and product roadmap.
In B2B scenarios, requests from large clients need careful consideration. Sometimes, fulfilling these requests brings revenue and goodwill, which are essential for long-term relationships. However, it's crucial to differentiate between essential client needs and requests that can be negotiated or delayed.
Effectively managing this dynamic involves understanding the politics behind requests, prioritising based on strategic importance, and communicating transparently with clients. This approach helps fintechs maintain their product focus while nurturing valuable client relationships.
Aligning company and product strategy
Successful fintechs like Wise integrate their product strategy seamlessly with their company mission. Their vision of making money borderless is reflected in their product offerings and across all operations, including marketing and customer support. This integration prevents conflicting goals within different teams, fostering a unified direction.
Having a single, clear mission serves as a guideline for all decisions. It helps to determine if new initiatives align with the company's goals. In cases where an idea doesn't fit the mission but still holds value, it's considered an exception rather than the norm.
Well-executed product and company strategies are evident in how these companies present themselves. Their websites and product offerings communicate their mission, making it easy for customers to understand their focus. This clarity and consistency across different teams and products are key to their success.
In conclusion, Jas Shah's journey and insights highlight the vital blend of business expertise and technological innovation. TransferWise's success showcases effective development guided by a clear mission.
Launching a Fintech venture requires meticulous planning and adaptable visions. To stand out, business leaders must cater to diverse customer needs, offering unique features or targeting specific segments. Niche businesses should focus on sustainable growth through ongoing customer engagement and feedback integration.
Lastly, aligning company and product strategies ensures coherence and clarity.
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