Don’t be scared of failure, but fail fast, was one of the key messages from Omeed Mehrinfar, Plug & Play, fintech regional director, Europe, at BNP Paribas’ Cash Management University in Paris last week.
When it comes to corporate innovation, having debates on technology and sponsoring commercial activities has a limited value “threshold” if it is not coupled with innovative activity, he argued to an audience of treasurers.
“It is more of an announcement culture rather than an action culture when it comes to corporate practices,” Mehrinfar said in his keynote speech titled ‘Corporate innovation: walking the talk’.
Why innovate at all?
Companies that don’t invest in innovation are under threat of extinction, Mehrinfar argued.
Enterprises lifespans are on the decline. In 1965 the average S&P 500 corporation had an estimated lifetime of 33 years, according to Mehrinfar.
In 1999, this figure was reduced to 20 and it is expected to lower to 14 years by 2026, he claimed.
To maintain a competitive edge, traditional companies will have to maintain their growth in adoption of artificial intelligence (AI) as they exopodite out processes to automated machine learning.
Companies such as Google and Facebook are continuously mentioning getting banking licenses and broadening their scope of product offerings, “not just in their respective industries but actually coming and rubbing shoulders in your industries as well,” said Mehrinfar.
“Amazon used to sell books and today they are getting their banking license.
“If you were to tell me that Facebook and Amazon were not looking to come into your market…you are highly mistaken. Corporate innovation is as important as ever,” he added.
Fintechs need corporates
Corporates must ensure they remain in the S&P 500 over the next few years but fintechs and start-ups also need to work with corporates, Mehrinfar said.
For fintechs to grow at such an exponential rate, they need corporates to bring them to the table in new markets. They need to utilise corporations’ existing client basis and infrastructure.
“The two main components that start-ups can offer banks are cost savings and driving revenue,” said Mehrinfar.
However, most of Google’s successful product offerings have been based on acquisitions.
Some of the best internal innovations were “cool but gimmicky” and not deemed as Google’s greatest successes. Google Glass and Google Plus are examples of this.
“When I talk about innovation, I am not just talking about new technologies. It is also about the organisational culture and the best practices, he added.
Corporate culture shifts are also important for innovation, according to Mehrinfar.
“A lot of the corporations are opening innovation labs. It is more than just exposing their teams to new technologies and educating them. It is also to adapt and expose to new cultures.
This is really getting out of the suit and tie culture and really getting into the sweaters and trainers culture.
Read other reports from the December 2017 BNP Paribas Cash Management University here:
- BNP Paribas Cash Management University day 1: changing banks and future skillsets
- BNP Paribas Cash Management University day 2: cyber attacks, predictive analytics and investing
- Decoding the digital revolution: the best is yet to come
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