A Key To Fintech Company Success Is Being Purpose Driven
Austin Mac Nab is the CEO and founder of VizyPay, a payment processing FinTech with transparent, money-saving services for small businesses.
To succeed in a fiercely competitive market today, fintech companies must have a clear purpose that extends beyond the bottom line. That purpose should be the north star that guides the direction of the company. Fintechs that take the time to embed a strong sense of purpose in their companies can positively impact company growth, competitiveness and innovation.
The Why Of Purpose
The Harvard Business Review defined organizational purpose as “an aspirational reason for being which inspires and provides a call to action for an organization and its partners and stakeholders and provides benefit to local and global society.”
Put more simply, purpose is the reason a company exists. Clearly defining that purpose can help fintech companies stand out from the competition, meet company goals and shape company culture. This sense of purpose can also guide decision-making and serve as a road map for overcoming business challenges and navigating market changes.
Most fintech companies recognize the importance of company purpose but have varying degrees of commitment to their purpose. A survey of fintech companies by Pathward found a sizable variation in the degree of commitment companies have to their stated purpose. A little more than half of the respondents (51%) indicated that purpose guides their strategy but has a lesser role in the day-to-day decision-making, and 26% said they embrace purpose culturally but do not leverage it to drive strategy or business operations.
Fintech companies can elevate their commitment to their purpose by following several key steps to embed purpose in their DNA.
Steps For Making Purpose Part Of Company DNA
Step one is clearly defining their purpose in simple, impactful language. To help do this, fintech company leaders should think about what inspired them to start their company, what issues they are passionate about and what values are reflective of the company. Feedback from employees, customers and other stakeholders can help determine how well the defined purpose resonates.
Next, fintech CEOs and founders should consistently communicate the company purpose and ensure that everyone across the organization understands that purpose. This is especially important for millennial and Gen Z employees who want their work to contribute to a higher purpose and are more likely to work for and stay with fintech companies that have a clearly defined purpose. Fintech company leadership can help employees understand how their work contributes to organizational purpose by discussing the topic in team meetings and encouraging staff to ask questions. The Pathway survey revealed that three of the top ways fintechs reinforce purpose is through educational materials, leadership by example, and email and newsletter updates. The result of this communication strategy should enable staff at all levels of the company to walk the talk by consistently leading with purpose in all customer interactions.
Another key to making purpose part of company DNA is to align company strategy and decision-making with purpose. Company leaders should incorporate purpose into product development, company policies and corporate social responsibility initiatives. Keeping purpose at the forefront of operations internally can help fintechs deliver on purpose externally.
Lastly, incorporate a purpose-driven approach to hiring. That means hiring candidates who share organizational values and beliefs. This approach builds teams that are committed to the company and engaged in their work.
Benefits Of Being A Purpose-Driven Fintech Company
While becoming a purpose-driven company is an ongoing process, it pays dividends in many ways. First and foremost, it makes the work more meaningful. For example, at my company, VizyPay, employees at all levels feel that the company purpose of championing small businesses is the most rewarding aspect of being part of the company.
Being a purpose-driven fintech company also attracts top talent. That’s critical for fintech companies battling it out for talent in this fast-growing industry. A report by Barclays noted that for the first time, talent acquisition is cited as the second-most pressing issue for fintechs across EMEA, APAC and the Americas.
Fintech company growth can also be accelerated. According to Deloitte, “purpose-driven companies witness higher market share gains and grow on average three times faster than their competitors, all the while achieving higher employee and customer satisfaction.”
A report by Ernst & Young found that “companies with a strong sense of purpose are able to transform and innovate better. Executives who treat purpose as a core driver of strategy and decision-making reported greater ability to drive successful innovation and transformational change and deliver consistent revenue growth.” That is a key benefit for fintech companies operating in a hyper-competitive, fast-moving and evolving industry.
Success for fintech companies today is strongly tied to a commitment to purpose. Purpose-driven fintech companies can attract top talent, accelerate growth, and boost business agility and innovation. As these benefits accrue, it’s clear that fintech company winners will be the companies that best define and operationalize their purpose.