Fintechs from Silicon Valley are being hampered by their lack of understanding about how the incumbent financial services firms in the market operate, according to Rosario Ingargiola, founder and CEO of OTCXN.
Discussing the biggest barriers to adoption for fintech solutions, Ingargiola explains that the primary concern is usually related to how these solutions comply with the existing regulations in the market.
Specifically, he says that financial services firms want to ensure that the necessary Anti-Money Laundering (AML) and Know Your Customer (KYC) requirements are in place before they’ll even begin taking an in-depth look at the solutions being offered by fintech firms.
But Ingargiola says that another barrier to adoption is that many fintechs from Silicon Valley don’t know how to effectively interact with the existing financial services firms. Ingargiola himself is based on the West Coast, but has 15 years of experience working in the financial services industry.
“A lot of the Silicon Valley types have no experience working with the incumbent financial institutions, there’s a lot of naiveté about what they might be willing to do or how they might be willing to implement a solution. You have to know how these firms work, they will not spend a lot of money and do a lot of work. It takes a long time, you have to basically go in and do everything for them and spoon feed it to them,” he explains.
Ingargiola adds: “I think that one thing that is sorely lacking with the Silicon Valley types, particularly when you look at the FX space and the capital markets space, there’s just a real dearth of domain expertise. They simply don’t have the domain expertise and so even if they have really clever technical solutions and they understand a problem at the surface, they may not understand the full implications of that on a firm and what’s required to actually bring something like that to market.”
You can watch the full interview here: