Why Is Agile So Important For FinTech?
I have written in this blog before about the challenges of hypergrowth in a few different industries. In particular, why the Agile development methodology can help any business experiencing hypergrowth, but it’s worth looking again at one of the fastest growing types of business to see what Agile means for these companies.
I’m talking about Fintech. Also known as financial technologies, this is an area of financial services that has been turbo-charged by the growth of modern technology and the ability to distribute applications globally with ease.
Last year the global market for Fintech was estimated to be around $112.5 billion. Analysts estimate that that this will triple to around $332.5 billion by 2028. This is a stunning rate of growth for an entire industrial sector and it reflects just how much this area of financial services is influencing all aspects of banking and insurance today.
There are many companies in the Fintech market that will be experiencing prolonged periods of hypergrowth. This is where the business is growing by at least 40% each year – some companies will be seeing much higher growth rates as they suddenly become popular and scale up.
When a Fintech suddenly becomes popular and growth is exponential then what really matters? I’d say there are three key areas for the management team to focus on:
- The product: the product must have interested many customers for it to suddenly be taking off. However, can it cope with the additional users? The management team immediately needs to ensure that the product or service can scale so new users are not disappointed by their experience of the new tool.
- Innovation and growth: once your product is out there, someone will immediately copy it. You need your development team to be on top of new ideas and changes in a way that allows regular rapid updates. The service must be visibly improving over time as well as adopting new ideas.
- Service: more downloads and users mean more customer questions and interactions. Staying on top of this will usually mean finding a customer experience partner – or rapidly scaling up your internal customer service team. Either way, it’s important to manage customer interactions so this is really an integral part of point 1 – just ensuring the product works. When customers call, you need to answer their questions.
Point 2 is where Agile can really make a difference here. Point 1 is focused mainly on infrastructure – can you manage more users at the same time? Do you have the processing power and storage to cope as your user base increases? Point 3 is focused on managing customer interactions and can often be resolved by finding a partner that is an expert in customer experience.
However, point 2 is where you need to show that the product is regularly being updated, you are trying new ideas and adopting the best ones, and you are improving the product in a regular and visible way – staying ahead of any competition that decide they want to just copy your core product.
To my mind, this is where IT strategy and the focus of the CIO is at the top of the decision list for the CEO. The CIO is responsible for infrastructure and future development so 2 out of the 3 most important business areas during a hypergrowth phase are related to IT.
Agile allows your development team to quickly adapt and experiment with new ideas and in a hypergrowth environment this is not just a refreshing change compared to traditionally slow software development cycles – this will be critical for survival and success. Hypergrowth requires Agile to ensure that products can grow just as fast as customers are demanding new ideas.
If you are running a startup and you need to scale up your systems rapidly, then consider the use of Agile. Read why Agile is so important for startups.