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FinTech: 5 Automation Trends That Are Impacting the Industry Right Now

FinTech

FinTech: 5 Automation Trends That Are Impacting the Industry Right Now

The FinTech industry is rapidly moving toward automation as a source of efficiency. The move to specific tools and software programs increases speed and accuracy of processes. It also keeps employers on their toes as they need to quickly evolve and learn. Many of these programs previously required specialized training and adaptability.
Automation helps with repetitive procedures and simplifies complicated tasks. It increases accuracy and safety measures, while minimizing human error. Expectations indicate that the FinTech industry will extend its tech integration significantly over the next four years.
Here are 5 automation trends that are impacting the Fintech industry right now:

1. Human Resources Management: This used to be one of the least automated components, but now software like Workday and 15Five are building platforms to assist workflow with related systems that support employee management. Finance companies increasingly recognize that their people are the most valuable resource and need to be managed more thoughtfully as well as efficiently.

2. Mobile: Finance companies now consider mobile oriented tech as part of the core work-flow. The industry relies heavily on its ability to get work done efficiently. FinTech continues to utilize software which speeds up communication and productivity. Mobile used to be considered a security risk by the financial industry. Now it is considered a way to enhance productivity as well as provide more flexible workflow for employees.

3. Customer Support: More automation is taking over customer service. This support has advanced tremendously with certain software programs that include internal systems to support customers. Software systems such as Fresh Desk and Zen Desk are cutting down on the head count needed for customer service departments in some companies. But more importantly these new systems are improving the customer experience and the lives of the people working in those departments.

4. Billing/Invoicing: Payments systems like Stripe, invoicing and billing systems like Freshbooks, and more advanced ERP systems Netsuite are examples of programs that continue to reinvent the way FinTech is automating business functions. Although many companies are still at least partially stuck in the past of creating manual invoices and payments, these automated systems are increasingly taking over. Both the customer and the vendor win with greater automation in this area. Vendors cut costs and get paid faster. Customers benefit from this greater efficiency of vendors with lower prices or higher value delivered for their purchases.

5. Accounting: Xendoo, Zoho, Quicken online and other systems automate are automating the accounting, bookkeeping, and tax filing functions of businesses. Traditional accounting software, and human bookkeepers and accountants, still have an important role to play in this area, but the accounting business is rapidly changing as well due to technology. The number of people involved with these activities is likely to shrink dramatically as automation takes over more of these functions. Ultimately businesses and their customers will benefit from this via lower operating costs that allow for better value to be delivered rather than spent on administrative functions like accounting.

It is crucial for companies of all sizes to be knowledgeable about this trend and keep their business updated as automation continues to reinvent Fintech industry jobs. You have to be able to adapt quickly to these changes. Our previous ideas and habits of doing business are changing, and we have to keep up with those changes or be left behind by competitors who will adapt more quickly

Automation is impacting Fintech employees in a variety of complex ways so it’s critical for employees to have a greater understanding of and training on different software systems to ensure they keep up with the automation and benefit from it rather than viewing it as a potential threat to their jobs. There is no way to stop technology. All of us need to work hard to stay on the right side of its inevitable progress.

5 Mistakes New College Grads Make as They Enter Entrepreneurship

It’s that time of year again. Thousands of qualified college graduates are getting set to enter the workforce. They were promised that their hard work and diligence will earn them an attractive job and a high chance of success.  With ambition, motivation, and dreams, scores of young men and women will forge their way into the business world. Some of them have lofty goals of entrepreneurship.  Many are under the impression that whatever works for high profile examples of successful leaders in business will also work for them. Public information and theory are often misleading, and so is attempting to imitate another company’s or leader’s blueprint. According to some experts, new college graduates often make five brutal mistakes as they try to navigate their own potential new enterprise.

1) Recent college graduates think they know a lot more than they do upon graduation: Implementation is different to theory and ideas, so you need to be able to bring operational performance and many other skills to the table. Knowledge is one thing, but true execution will provide the experience you really need.

2) Many do not understand how funding works and the capitol needed in the initial phases of a business. Inexperienced people are misled when it comes to startup funding and what is needed to begin and grow a business.  Often young founders don’t think about basic concepts like unit economics, which is selling something for more than what it costs to make. Even some very well funded startups tend to ignore this.

3) Raising funds does not equal success. Many young entrepreneurs are focused on the superficial belief that the more money they raise, the more successful their business is going to be. While it’s true that, everything else being equal, having more money to spend on your business is good, there is a lot more to it than that simple formula. Plenty of businesses fail because they raised too much money and it encouraged them to do things that didn’t make sense. Many other businesses fail because they raised money that they believed would fund all of their dreams of growth, but it wasn’t nearly enough. Other businesses fail because they raise the wrong kind of money, such as debt they can’t repay on time or equity that causes them to lose control of their business.

4) Inexperienced founders often overestimate their own importance and don’t appreciate the importance of the team they build around them. It is not easy to find skilled people who also happen to be a good fit for the culture and mission of your enterprise.  This takes a lot more time, effort, and trial and error than many founders realize if they haven’t done it before.  You need a great team to build a great team. But that the classic chicken and egg problem you have to solve. You have to be careful, and realize you will make mistakes, about who you hire early in the life of your company. Only offer substantial equity and responsibility to those who have proven themselves. Recognize your hiring mistakes and correct them quickly. Teams often don’t rise to the level of their best people. They often sink to the level of their worst people. Keep that in mind as you build your company.  
 

5) Know and own your limitations. Young innovators especially, though it applies even to more experienced entrepreneurs, tend to lack self-awareness of their own weaknesses. These blind spots can be disastrous.  Most highly successful people understand their weaknesses and surround themselves with others who can do what they cannot, who share a similar vision, and with whom they can collaborate. Inexperience can lead to overconfidence. This is an especially dangerous pitfall for early stage startups and new entrepreneurs. 

Elizabeth Holmes and Theranos is a good example of a culmination of all 5 of these mistakes and what inexperience can do to a business idea. She raised $900 million. Her company was worth billions. She was on the cover of magazines and featured on TV shows and one of the best founders in a generation. But it ended in failure and she may go to prison for her behavior.

There are real world, and sometimes life altering, consequences for making these mistakes. Think through your decisions carefully and be aware of the risks you take as you pursue your exciting and hopefully rewarding entrepreneurial journey.

Two-Thirds Of Startups Fail Within the First 5 Years. These Are the Toughest Lessons I’ve Learned Running One For 8 Years

In the uber-competitive startup world, surviving is success in itself.

Conventional wisdom says that 90% of startups will fail. So founders, listen up: Before envisioning your new company as the next headline-making unicorn, consider all the hard work—and luck—it takes to even reach profitability.

Many aspiring entrepreneurs love to picture the finish line, but rarely account for the daily chaos they’ll face along the way.

As a founder, you have to come to terms with not having complete control—of your team, the market, or your valuation. This is one of the most valuable lessons I’ve learned in my eight years of running CapLinked.

We’re not worth a billion dollars. And for that reason, we’re not celebrated as a true success in the tech industry. Because the tech world is a lot like Hollywood—it’s all about the stars, the elite few you read about in The Wall Street Journal and Entrepreneur. But in reality, in the tough-to-break-into world of Hollywood, anyone making a living as an actor is a success story.

The same is true for tech startups.

If you survive and you make money, that alone makes you part of an elite group—the top few percent. I’m proud of what we’ve accomplished and think what I’ve learned along the way is well worth sharing.

These are the six toughest lessons I’ve learned while building a business from the ground up:

1. You can only achieve what your team is capable of doing

Seem obvious, but many people don’t get it. The mythology of startups revolves around the idea that you should always shoot for the stars, but the harsh truth is that you won’t always possess the firepower to do it.

Your company is limited by the people within your organization. So we should be teaching startups to work with what—and who—they have. That way, founders can set reasonable, attainable goals for their team and their company.

This isn’t something we talk about enough. In the startup world, there’s this overly optimistic narrative that anything is possible. But early-stage startup founders can’t think this way, because when immediate goals are unrealistic or unachievable, a startup is bound to crash and burn.

For this reason, self-awareness is key to survival for startups. If you’re going to swing for the fences, you have to fully understand what your team can do. Or you will just end up striking out.

2. You have to understand what your advantage is

One of the first things every founder should do is determine their competitive advantage.

This will save you a lot of time—and heartbreak. If you can’t quickly determine your competitive advantage, you probably don’t have one. And if you don’t have one, you will never succeed.

Think of it this way: If you’re playing poker and don’t know who the weakest player is, it’s you.

You need to determine your advantages, disadvantages, strengths, and weaknesses. Like with knowing what your team can do, you have to know yourself inside and out.

3. Most goal-setting strategies don’t work

Goal-setting is one of the most useless activities that a company can spend its time doing, mainly because the generally accepted idea of how to set company-wide goals is inherently flawed.

Instead of having everyone focus broadly on a universal goal, companies should focus on helping each employee become their best, most productive self. In fact, I invest in an employee performance enhancement company that is pioneering an approach built on this exact philosophy. The company is called 15Five, and I expect that some day it will be a unicorn.

The power of this approach is that it works from the bottom-up, rather than the conventional top-down approach. It evaluates each team member as an individual with distinct abilities and strengths. It provides employees with support, not just a grade. And in turn, it helps businesses see better tangible results across the board.

4. You have to use data to evaluate people’s skills

Being data-driven is almost always a smart choice when evaluating your people as well as your company.

Before I began relying heavily on what the data told me, I placed too much emphasis on what people told me about their skills and knowledge. A lot of the time they ended up producing more excuses than results.

My advice is this: Set high standards for the people you hire. Because in this industry, 100% of the value truly is made up of the people involved. Sure, IP and patents are the marks of a company with great value—but that’s only true when they’re associated with the right people.

And for that reason, every tech startup—or any startup, really—should be using data-driven benchmarks to ensure their people are producing great results. Don’t accept excuses.

5. You have much less control over things than you think you do

The first step is accepting that many of the factors that make a startup successful aren’t within your control.

You’ll never have control of the people around you, the industry you enter, or the value of your company. Outside of your own behavior and decisions, there are tons of variables that are completely immune to your influence. Many people don’t realize that there’s a lot of luck involved in business—especially in the startup world. It’s really not that much different from winning the lottery.

Here are a few things founders often think they have control over, but really don’t:

Attracting talent. Your company will always seem more interesting and attractive to you, the founder, than it is to potential hires. The people you want as part of your company won’t always want to join it.

-Fads and phases that launch industries and products into the stratosphere are largely unpredictable and difficult to understand. Many investors put their money into what is trending, even when it’s not clear why it’s trending. For this reason, the value of your company may be volatile and mostly out of your control.

-The motivations of other people. You’ll never fully understand what attracts people to a company or drive them to do almost anything they do. Your startup may seem like the most interesting and attractive opportunity in the world to you, but investors and employees often won’t see it the same way.

One great example of the slipperiness of trends is social buying. Years ago when Groupon was the biggest thing in startup land, billions of dollars were invested in hundreds of copycat social buying startups. Groupon has since proven to be mostly a flash in the pan and the hundreds of copycats mostly became nothing. Billions of dollars disappeared and thousands of starry eyed founders and employees ended up with nothing. It was just a trend that fizzled out.

The value of your company, in many ways, has absolutely nothing to do with you. So by all means, do everything you can to succeed. But also accept the fact that you have very little control over what happens.

6. Running a business is inherently chaotic

Founders must have a high tolerance for extreme uncertainty.

Every day I respond to multiple crises I had no idea were coming. One day, we have problems trying to renew an insurance policy. The next day, an employee unexpectedly quits, leaving a number of responsibilities to an already busy manager or putting more on to me. The day after that, a customer reaches out with a major issue, entirely shifting our focus and diverting time and resources we’d planned to spend on something else.

When investors are involved, the chaos rises to a whole new level. You have to worry about whether they’re going to give you the funding they promised. Depending on the kind of money you take, your investors may be setting the agenda and constantly disrupting the priorities you set for yourself and your team.

Each of these lessons drives home the point that awareness is the most important quality for a founder to have. Self-awareness. Awareness of the things you can control and awareness of the reality that a lot of factors will be completely out of your hands. The awareness that success requires knowing exactly where your company stands in relation to competition. And the awareness that even if you do everything right, and make all the right decisions, success is never guaranteed.

Christopher Grey is the co-founder and COO of CapLinked, and enterprise software company offering an information control and risk mitigation platform for the sharing of confidential or sensitive documents and communications outside of the enterprise. Previously, he was a senior executive and managing partner in private equity and corporate finance for 15 years and directly involved in the deployment and management of billions of dollars of debt and equity investments in various industries.

Christopher founded two companies, Crestridge Investments, a private equity firm that made debt and equity investments in micro cap and middle market companies, and Third Wave Partners, which made debt and equity investments in distressed situations, and was managing director of a subsidiary of Emigrant Bank, the largest privately owned bank in the country. Most recently, he is a co-founder of TransitNet, a platform for security token issuers offering title verification, chain of ownership tracking, and other post issuance tools for improving the security and reliability of security token ownership.