In today’s economic conditions, tangible, impactful innovation is table stakes, The Bank of London Chief Markets Officer Shaunt M. Sarkissian writes in the PYMNTS eBook “Baseline 2022: What the Next Six Months Holds,” and companies looking to ensure they’re meeting that standard need to be asking tough questions.

For many years, tangential and incremental developments were considered “innovation” and the hallmark of many fast-moving companies — particularly in payments and FinTech. And in times where capital is easy to raise and venture and PE funds flush, this was the underpinnings of startup and innovation initiatives. Soaring valuations with limited and minimal impactful innovation nor tangible IP seemed to be considered normal — while deep down inside we all knew what was coming. And now it has arrived. And in many ways, it’s a good thing for the future and long-term success of banking and payments around the world.

For years, most in the banking, payments and FinTech markets have known the core challenges that exist in our industry. They have continuously been:

• Legacy systems and processes needed to be modernized
• Global commerce requiring more global streamlined capabilities
• Safe, cheaper, and more transparent compliance/regulatory frameworks
• Real-time, secure and digital (i.e., faster, better, cheaper and stronger)

But in boom times, rolling up your sleeves and getting to work seemed less necessary. Thus incremental and peripheral innovation (a better UI/UX in your banking app, putting a card text vertical vs. horizonal, etc.) passed as innovation — not enhancing a fundamental transactional system, or re-defining/rebuilding core banking systems for the next generation. That will no longer fly, and companies (startups and large established players alike) will need to focus on substantial and meaningful innovation.

In this market and economic conditions, real business models and tangible, impactful innovation are table stakes. Thus companies to ensure they are always meeting that standard, and asking themselves and their teams the following:

• Is your product and platform solving a critical industry issue?
• Is your business model relevant and actually profitable?
• Do you have or in process of getting strong and defensible IP?
• Does your product, service, or offering have true value to your clients and users?

Real innovation takes time — and can be brutally difficult. It is never the easy road, and frankly not for every company/team. But its rewards are all the more significant, and its impacts profound and lasting.  And that makes the journey one worth taking.

So for the rest of 2022, companies that can address those issues and have substantial innovation will thrive — and come into the forefront and spotlight. Sometimes these companies may not be as flashy, but they are all the more substantive. And those are the companies that can and will truly change the banking, payments and commerce industries across the globe.

If you are a company or part of an organization that fits in those areas, be excited for the rest of the year and opportunity presented. If you are not, do everything you can to be just that. Otherwise, as the saying goes, see you on the other side.