[1mm Financial Talk] "Fintech Success Hinges on 'Personal Skills'"

[Asia Economy Reporter Eunju Lee] “What determines the success of a fintech business is actually the ‘personal skill.’”

This is what key stakeholders in fintech companies unanimously say. Even companies that emphasize innovation, novelty, cutting-edge technology, and IT ultimately need strong ‘sales capabilities’ that can firmly establish connections with traditional financial institutions, as part of the explanation. Even companies equipped with various technologies such as AI with excellent data analysis capabilities must fundamentally have a business model that generates revenue by ‘connecting’ financial products to customers through cooperation with banks.

An executive working at a fintech company explained, “That’s why it’s important to deeply understand the culture of traditional banks.” Just as a retailer can secure quality products by deeply understanding the interests and culture of wholesalers, the fintech industry is no different. He said, “Ultimately, the reason fintech companies hire ‘people’ who have worked in traditional banks is because they know how existing banks perceive fintech and big tech, and how they have conducted sales.”

However, they said, “Much of traditional financial sector sales rely on ‘personal skill.’” A banking official explained, “When fintech companies deal with traditional banks, it is often difficult to open relationships through purely arithmetic deals like offering to reduce fees to a certain extent,” adding, “Face-to-face ‘personal skill’ of trusted individuals with partner banks determines the relationship.” Here, ‘personal skill’ starts from the individual’s personal network. From this, it is necessary to keenly understand the needs of partner banks and offer more than that, but it also means that it is difficult to exclude human relationships such as personal affection (‘jeong’) in the sales process.

For this reason, major fintech and big tech leaders pay close attention to recruiting financial professionals who have been active in traditional banks. A financial sector official said, “Looking at major big tech and fintech companies, there are quite a few people with brilliant portfolios such as famous product planners from traditional banks.” He added, “The ability to recruit them ultimately depends on the company’s financial strength,” and “Although many fintech companies are springing up, only a few will inevitably remain in the market.” Another financial sector official pointed out, “That is the reality and limitation for many fintech companies,” adding, “Because many aspects are ultimately determined by relationships with traditional financial institutions rather than independent business models.”