144. The blockade is inside

Gerard,

Last time, I wrote about my experiences with FinTech start ups and that it is not so easy to obtain these new developments via a merger within your company. At least for companies of the size of my company with up to 50 employees. Obviously, for many larger companies it is a piece of cake to buy a start up. This obviously happens frequently, and companies will need to continue to do so to continue to develop and renew themselves.But you also wonder why big companies who have sufficient resources don’t come up with innovative initiatives themselves. I recently read an interesting article about this with the direct stakeholders of a few large companies in the financial sector. It appears that internal procedures and staff in half of all cases block the development of new ideas and activities. Risk and compliance departments often have a natural difficulty to control and assess activities which are off track, for which there are no written procedures yet. Furthermore, there will be staff who view new developments as a threat to their position and try to stall the developments. And last but not least, you obviously need as a business all your energy and focus to grow in your existing environment.

So for smaller companies, FinTech is too expensive to integrate into existing operations due to the high valuation of start-ups. For large enterprises, it is the internal reserves that are blocking new initiatives. What then is the best way to initiate new developments? Perhaps, based on the foregoing, it might be best to do this outside of your company, through a new entity, group or department which is set up so that can work in peace. We are now busy writing algorithms internally. This happens in a separate location within the company, so that the staff are not ‘bothered’ by daily routines. Have you already thought about how you want to implement your ideas in your business? So far I have only been able to read about your enthusiasm, but not about your specific ideas and how you want to implement them. I could write about that next time.

Regards,

Erik