How To Apply S.E.E.E.D?Gorkem Cokcetin
S.E.E.E.D practice is a very effective way to engage with Fintech for the FIs. S.E.E.E.D involves both relevant parties like fintech engagements-innovation teams, digital team, business units, IT, procurement and legal into the process of engaging with Fintechs and speed up the time to market
Scouting usually started with an existing demand from business units. However, for a more proactive approach I advise to start with need assessment with business units. These meetings will help to understand all aspect of the problem or the possibility to find the right solution and to uncover hidden areas for possible FinTech solutions.
I never had a difficulty in scouting. First, I approach to my existing contacts hubs like DIFC Fintech Hive and ADGM and international connections like trade delegation and share them the need. Partners like Microsoft, Visa or Mastercard also can help you with their partner network and their innovation-fintech program.
Also, if you have LinkedIn profile with Fintech or digital roles daily basis many FinTechs approaches you for introducing their products to you. If you have a small team you cannot dedicate an hour for every of them for video call. Best is to create one pager hot sheet to get the most needed information from them and keep those in your reach to review for further needs.
Even though most of the scouting based on the business need it is important to use your instincts when you feel a good opportunity, initiate the relation and introduce it business
There is a blurry line between scout and engage. Engagement usually start when you scout and get in touch with them to understand the basics of FinTech’s proposition to take to the engagement level.
To speed up the engagement creating sone ready made documentation is crucial. You can start with a light NDA and maybe MoUs which you can create together with legal department which will not scare the FinTechs but to protect mutual interests.
Another key stakeholder for engagement is IT architecture and IT security teams. It is hard to involve these teams in initial meetings. Best to form a set of questions to be sent to FinTechs prior to engagement which to cover the most important points and confirm required infrastructure and IT security check points and create a base score. This also helps to understand the maturity level of the FinTechs.
Another key point not to be neglected is understanding the commercial model of Fintech for the engagement. This might seem to early to worry about, but it can be an obstacle due to budget constrains in some projects.
It is also good the bring someone from the business side in this level to initiate some evaluation stage work.
This is stage where business involvement is crucial. Business should drive the meeting and need to be sure that their requirements will be met. However, business usually have tendency to bring the table some nice to have functions as very important issues while FinTechs are insisting their solutions is good enough.
Sometimes It may sound like while business is asking for a Bentley in price of a family car while FinTechs are offering a scooter. But the actual need is a reliable 4-seater. It is Fintech engagement team’s role to uncover the most important needs and bring to sides to the common ground.
Evaluate is also the stage where some experimentation might start with PoCs or test demos. In this stage it is advisable to keep the PoCs in a level which IT integration is not heavily needed and cost is zero or low.
Evaluation is stage where some senior level buy-in happens. Every FI has its own mechanism like committees or work groups. In this stage creating a Value Proposition deck is very crucial. Value proposition deck should be built together with business. While business team focus on business case (financials and returns) fintech should focus on explaining dynamics of the solution and possible values in terms of experience, new business and productivity. Creating a simple flow demo of one-use case will provide amazing support for the VP deck.
Experiment stage is the crucial stage for the success of the engagement. Usually FinTechs approach to FIs with presentation, some mock-ups or demo apps which means there is no chance to see results even in a test environment. Experiment stage is the key to test and bring some assurance to go live.
Private cloud and an API sandbox are essentials for this stage for a real trustable experimentation. Moving from PoC to pilot requires a test environment close to real world.
Private cloud enables sharing real data or samples without terminating the security and privacy and run the software in a controlled environment.
API sandbox with replica of production APIs and some synthetic date could speed up the experiment stage. API sandbox lets FinTechs to show their full capacity and even create better demos. Bank on the other hand gets some assurance on the ability of the Fintech team skills and get a “sample” which can convince stakeholder easily as it has been built in their API infrastructure. The most important outcome of an API sandbox for both parties are reusability of the efforts in a possible implementation decision.
Moving from evaluation to experiment and to deployment procurement is another critical stakeholder. Usually fintech engagement or innovation teams have a small budget to conduct these PoCs and pilots which they can consume under the rules banks procurement policies. But most of the cases cost of PoC or pilots might exceed the level which they can use with an approval from procurement. Procurement should give some flexibility to Fintech engagements especially in experiment stage and stretch the limits to speed up the engagements
Without any doubt deployment defines the success of FinTechs engagements. However, in my past experiences and the feed backs shared by equivalents in different FIs shows that the success ratio is very low despite the efforts.
There is many to blame for the failures, but the main reason is the existing structure of organization which are not geared up for these types of engagements. This way some FIs have separate arms as VCs or incubation centre to manage these engagements.
If CEO or CIOOs want their Fintech engagement teams, innovation teams or digital teams to succeed in this Fintech era they should at least provide minimum two factors of 4C1P (Channel, Customer, Capacity, Control & Product) to these teams. (I explained the definition of 4C1P and what it means in the FIs in a separate blog)
Most of the FinTech engagements died or turn into a zombie engagement in these even required approvals and budgets obtained from top management.
In big FIs getting budget approval does not secure the fast deployment. There might be another important project running for the same business unit which consumes the dedicated IT resources if not a bank wide big infrastructure or a transformation project is going on.
Preferably having some control on the channel and capacity for engagement team is the best combination.