Eugenia Mykuliak explains why institutional clients prioritize stability over innovation — and what fintechs must do to win their trust and drive adoption.
By Eugenia Mykuliak, Founder & Executive Director of B2PRIME Group.
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Fintech is a field where people love to talk about innovation. It’s the lifeblood of startups, the story full of promises that investors like to hear, and often the reason why a company exists in the first place – to experiment with something “new”: new features, new systems, new algorithms. But even if innovation is the preferred language of the fintech world, it’s still important to remember that institutional clients tend to speak a very different dialect.
One of the most persistent misconceptions among fintech business leaders is the belief that banks, brokers, funds, and other large financial players are constantly searching for the newest and most groundbreaking solutions. Companies often assume that so long as they pioneer a product that’s more advanced and “visionary” compared to what’s already established in the market, institutional adoption will follow naturally.
In practice, however, that is rarely how these decisions are made.
Innovation is Attractive — But Not Decisive
Mind you, that doesn’t mean that institutions don’t care about progress at all; they are simply not driven by it in the same way fintechs are. For a fintech startup, innovation is often the core value proposition, but for an institutional client? It’s just one variable in a much larger equation.
Large-scale financial organizations tend to operate under very different constraints than fintechs. They don’t have the luxury of moving fast and patching things “later” as they go. Every decision is tangled in a complicated web of regulatory requirements, capital rules, internal risk policies, security standards, and much more. Which means oversight and consideration of anything new is a far more difficult process for these parties.
When a new tech stack presents itself, it is not judged solely on what it can build, but also on what it might break. An institution has to ask itself: “If we plug this into our system, what could go wrong?” Will the solution interfere with our existing infrastructure? Will it trigger new legal obligations? Who is accountable when something does go wrong? And how quickly can it be fixed?
All these many questions bring about a highly different change in perspective. From the outside, this can look like conservatism or resistance to change. From the inside, however, it’s actually much closer to risk management. When financial institutions handle billions in client assets, they can’t afford to rush – even small disruptions can have costly consequences.
For this reason, these organizations always strive to minimize surprises. And “novelty,” by definition, introduces uncertainty. Even when it promises a boost in efficiency or cost reduction, the transition itself carries risks of interfering with a formula that institutions have already balanced out. And that’s why innovation alone is rarely persuasive.
Ask most institutional decision-makers what they value in a fintech partner, and the answers are going to be remarkably consistent: stability, predictability, robustness, and operational continuity. This is not accidental. In their eyes, a less sophisticated system that performs reliably and without breaking is often more attractive than any cutting-edge solution with unproven behavior under stress conditions.
The Hidden Cost of Change
Another factor that shouldn’t be overlooked is the sheer cost of implementation.
When you are a smaller startup, adding a new tool or switching providers can be a relatively quick and straightforward decision – there is enough flexibility there to afford it. But institutional environments are nowhere that simple.
Every new integration doesn’t affect just one team: it affects multiple departments, from IT security to legal and compliance, to finance and reporting. And each of those departments have their own requirements, review processes and approval criteria. Before anything goes live, there needs to be mutual satisfaction among them, and that is often hard to achieve. It takes a lot of time and doesn’t happen without friction.
And even if the new solution gets adopted, there is still the adjustment period to account for. Large institutions can have thousands of employees, and depending on how big the integration is, they all have to learn new workflows. Existing systems and processes need updating, and so does internal documentation. All things that also consume a lot of time.
This is why “better technology” does not automatically translate into “fast adoption.” The biggest hurdle is often not so much technological in nature as it is operational. With transition comes friction, and friction has costs. While the change is taking place, performance can take a hit, errors can increase, and productivity can slow down.
Institutions have to consider first whether the proposed improvement is significant enough to justify such disruption of processes. And in many cases, the answer is ends up being “no.”
What Can Fintechs Do to Meet Institutional Needs
The disconnect between the two often arises because startup culture and institutional culture optimize for different objectives. Startups reward speed, experimentation, and flexible approaches, while institutions reward resilience, stability, and risk minimization.
The thing is: neither side is “wrong” – they are simply solving different problems.
This means that fintech companies targeting institutional clients need to adjust how they frame their proposals. They need to remember for this audience, reliability comes first. It’s the primary product which they trade in and what they build their reputation on.
How do you go about convincing someone like that? Show them that what you have works. Prove that your solutions are stable, and that you have risk controls properly in place. Operational maturity can be often be a much more influential factor in institutional collaborations than just having advanced tech capabilities. Institutions look for partners whose systems behave consistently across market conditions and whose organizations exhibit discipline.
At the same time, reducing transition friction can make a big difference. Solutions that integrate smoothly what the institution is already doing – without requiring any deep workflow overhauls – naturally face fewer barriers to adoption. That makes it a promising value proposition to polish up on. If your solution uses similar processes and doesn’t force teams to completely relearn how they operate, resistance drops significantly.
The key lesson for fintechs is this: “The easier and safer you make adoption of your services appear, the more likely that adoption becomes.”
