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Why R&D Investments are Important for Fintechs




Allocating R&D investments is one of the most critical decisions organizations make. It requires both industry domain knowledge depth and having the balance sheet “dry powder” to fund the initiative since adding solution comprehensiveness consumes both capital and time.

Today’s banks and credit unions want solutions that have hard business impacts, such as ROI, cost reduction, operating consistency, revenue generation lift, expanded customer acquisition, and enhanced customer experience. Hardware and software innovation ROI has been favorable for many years. Mission-critical, transactional-based software and predictive analytics-based software have seen considerable investment.

Creating the end benefits that customers demand requires both broad and deep innovation. For example, at ARGO, we have invested 40% of revenue over the last seven years back into R&D, which has continued to produce great benefits for our customers.

While this type of investment in R&D is unparalleled, the industry has proven that capital alone does not translate into success. Studying areas in depth to ensure substantial benefits can be produced and determining the proper technology infrastructure to have in place, are also necessary to ensure success.

With this R&D investment, the financial services industry now has access to:

  • A proven fraud detection solution with accurate fraud predictive models able to determine check, ATM, front counter and ACH fraudulent activity;

  • Omni-channel delivery capabilities, including digital and human-integrated channels for internet, smartphone, contact center and branch delivery supporting applications such as digital marketing, sales and customer service, loan and deposit fulfillment, customer engagement, financial wellness planning and advice, and machine-learning analytics for predictive customer attrition; and

  • Operational reliability with proven server uptimes, availability and solution reliability.

Achieving success through innovation requires a longer-term perspective. Heavy R&D investment helps achieve the goal of shifting our primary focus from quarterly profits to innovation value for banks and credit unions.

For more information visit the “History of Being a Disruptor through Ongoing Investment and Innovation” interview brief.


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