“Entertain the possibility that you might not be doing something that well. It just makes you more open, more receptive to the feedback that you do get, and the idea that maybe there you are learning something, that you should be doing something differently.” -Greg Palmer

The pandemic put fintech innovation on a near-vertical trajectory as financial brands pivoted into the next stage of our digital evolution. But despite the brilliant minds behind them, some of the fantastic new products we’ve seen in the last few years are failing.

Greg Palmer, Vice President of Finovate, joined the Banking on Digital Growth Podcast to share that he believes these failures stem from companies designing those products for rational people. But your typical consumer isn’t rational when it comes to their finances, so fintechs need to meet them where they are.

As Greg shared, the pandemic drove the financial industry to embrace technology more readily. There was a lot of hesitation from banks and customers to engage with digital financial tools in 2018 and 2019.

However, the pandemic changed things as banks and credit unions had to find ways to keep their doors open while meeting customers where they were at, which was increasingly on their phones.

Greg saw a lot of smaller financial institutions engaging with technology in ways they hadn't before. They realized that if they wanted to stay in business, they needed to meet their customers' needs.

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And since, pressure has mounted on financial institutions that haven't kept up with technology. The gap between those who have taken strong steps towards innovation and those who haven't is growing.

Think about the early days of electricity. Only 3% of businesses were electrified when the light bulb was first invented, but things changed quickly, and soon everything was electrified. James Robert shared that he sees parallels between this and the exponential growth of technology over the past few years.

The Importance of Putting People First in the Future of FinTech

Looking ahead to the future of financial technology, or FinTech, can be quite challenging, but we can always learn from the past to help us prepare. In particular, we need to focus on the people behind the technology, as it is ultimately about serving them.

When it comes to building a career in FinTech, it tends to attract those who are comfortable with numbers, are tech-savvy, and want to push the boundaries of what technology can do.

However, it's important to remember that at the end of the day, the technology we build is for other people to use, not just for ourselves.

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One of the biggest failings of FinTech is the lack of attention paid to the people involved. This isn't just about customers, but also about everyone involved in the process, from CTOs to IT teams, marketing departments, and even bank tellers.

Every person in the chain needs to be on board with the technology and understand how it benefits them and their customers. Otherwise, the technology may not be used to its fullest potential, and the innovation may fail.

It's not enough to just create a good product, as communication is key to ensuring everyone involved understands how it works and how it benefits them. Without clear and effective communication, there can be confusion, lack of clarity, confidence, and commitment, which can lead to failure.

To succeed in FinTech, we need to focus on the people and make sure that each person in the value chain understands the benefits of the technology and how they personally win.

It's a challenging task, but it's necessary to ensure the success of the innovation.

Bridging the Gap Between IQ and EQ in FinTech: The Importance of Emotional Intelligence in Financial Services

Within the FinTech and financial services world, there are two key aspects that are critical for success: IQ and EQ.

On the one hand, you have smart people with high IQs who are developing new technologies and solutions. On the other hand, you have the emotional intelligence, or EQ, that's needed to understand people's pain points and connect with them on a deeper level.

So, how do we bridge the gap between IQ and EQ?

Well, it starts with recognizing that it's a challenge that needs to be addressed. You can't just focus on technology and expect people to adopt it automatically. You need to be aware of the impact that new technology might have on people's jobs and financial wellbeing.

To bring innovation through communication, positive communication that connects back to people's pain points first and foremost, it's important to put yourself in the position of someone who's on the other side of it. You need to understand their concerns and fears, and then address them proactively. That means not only communicating effectively, but also structuring the solution in a way that incentivizes people to adopt it.

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One thing that's becoming more common in the industry is bringing in experts in psychology or human behavior to help bridge the gap between IQ and EQ. Maybe you're a great coder but not as emotionally intelligent, and that's okay. You can bring someone else onto your team who has that skillset.

At the end of the day, it's important to remember that not everyone is at the same level. Just like going to a gym, not everyone is already in shape. You need to meet people where they are and help them take that first step. Positive reinforcement and encouragement can go a long way in helping people adopt new solutions and technologies.

Understanding the Intersection of Human Behavior, Technology, and Finance

James Robert shared a fantastic analogy about how complex the human mind is and how understanding it can help us incentivize and motivate people through multiple modalities. He brings up the example of Peloton and how it built a community of people with a common goal and were able to motivate them.

However, he also notes that when life opens back up, people tend to fall back into their old patterns and behaviors. This is why he advocates for financial coaching and the need for financial advisors to become life coaches who can communicate with their clients and hold them accountable for their behaviors.

Greg adds that the fintech industry needs to understand that human beings are not always rational. He points out that the industry tends to attract people who are rational and build rational products that don't get used by people who don't engage with their finances in that way.

He cites an example of how people tend to make terrible financial decisions repeatedly while gambling at a casino, even though they know logically that it's a bad idea. He argues that there's some sort of emotional component involved that drives people to make these decisions.

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Greg suggests that the fintech industry needs to take into account the emotional side of things when building financial products. He mentions Dreams, a company that has won a couple of best of shows, as an example of a company that has been successful in bringing in this emotional side of finance.

Financial Brands need to understand their customers' emotions and incentivize them accordingly. For instance, he cites the example of mint.com, where people love getting big green check marks and seeing their numbers go up. However, if they don't get that experience, they're likely to turn off the product and never use it again.

The industry needs to build products that can engage with customers emotionally and incentivize them accordingly. By doing so, they can create products that people love and use regularly, rather than rational products that don't get used by people who don't engage with their finances in that way.

Small Steps Towards Growth: Making People Feel Good

The first step towards helping people is to make them feel good. And Greg suggest that we should ask ourselves a simple question every time we interact with someone new, "How am I going to make that person feel good?"

This simple question can help us become better at connecting with others and ultimately making progress on our personal and professional growth. By understanding how to make people feel good, we can improve our interactions with others, and in turn, make progress towards achieving our goals. Greg emphasized that this simple question can be applied to every conversation that we have with someone, whether it's a customer, a CTO, or a bank CEO.

The key takeaway here is that if we can make people feel good, we can build better relationships and ultimately make progress towards our personal and professional goals. It's a simple concept, but one that can have a profound impact on our lives. So, the next time you're interacting with someone new, ask yourself, "How am I going to make that person feel good?" and see how it changes your perspective and ultimately helps you achieve your goals.

Making progress towards our personal and professional growth is all about building better relationships with others. By focusing on making others feel good, we can build stronger connections and achieve our goals more effectively.

So, go ahead and take that first step towards making progress on your journey of growth.