When people think of innovation in the business world, startups–specifically technology companies–probably come to mind. This makes sense, as these businesses often use cutting edge technology and innovative business practices to disrupt the status quo.

In contrast, large enterprise businesses are typically viewed as slowly moving incumbents that are lagging behind on the innovation front. Bogged down by legacy infrastructure, mired in organizational red tape, and burdened by a general aversion to change, enterprise companies are slow to keep up. However, that’s not always the case.

In fact, the past several months have demonstrated that some major companies are able to respond dynamically to the broad challenges posed by COVID-19. This has been especially true in the fintech industry, where fintechs have delivered a series of innovations to help merchants and consumers navigate the pandemic.

To learn more about how large companies can innovate and respond to a rapidly changing world, PaymentsJournal sat down with Arnold Goldberg, Chief Product Architect and Senior Technologist at PayPal, and Tim Sloane, VP of Payments Innovation at Mercator Advisory Group.

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Enterprise companies are well-positioned to innovate

Enterprise companies possess certain characteristics that fuel innovation.

One major advantage that these companies have is scale, specifically as it relates to resources. Unlike some cash-strapped new entrants or smaller businesses with modest means, established players often have vast resources like diversified employee backgrounds and capital at their disposal. This resource advantage helps fund new ventures and paves the way for much needed innovation.

With the larger scale also comes more data. Sloane and Goldberg both underscored the importance of harnessing as much data as possible, be it transaction data, consumer data, or information from merchants. Since large companies have more data to work with, they can better identify key trends and develop products accordingly.

Another advantage of enterprise companies is years of experience. For many companies, years of being in business has resulted in a network of solid professional relationships. As Goldberg put it, when you’re a major company with a long history, “you have partners that love to work with you.” Through these partnerships, enterprise companies can tap into different markets and develop new capabilities in a way that less established companies cannot.