Digital Transformation: Emergent Fintech Engagement Trends 2018

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The What & How of Successful Investment Bank Engagements with Innovative Fintech Companies

This report assesses the changing nature of the relationship between investment banks and fintech vendors since the onset of the financial crisis, which marked the start of a period in which banks faced increased constraints – both internal and external – on their ability to fund in-house solutions development. As a result, the locus of innovation in fintech has shifted away from the ability of banks to develop solutions in-house and toward their ability to successfully engage with fintech vendors.

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As such, this report examines how banks are making sense of the emergent fintech vendor landscape in 2018, and it investigates the approaches banks use to engage with fintech start-ups outside the confines of traditional procurement processes. In doing so, the report quantifies the engagement initiatives of 30 Tier I and Tier II investment banks, appraising the outcomes thereof by gathering the views of a variety of bank stakeholders and emergent fintech companies.

Banks have, to differing degrees, struggled to capture, internalise and benefit from the innovative fintech offerings despite the proliferation of third-party solutions within their organisations over the last 10 years. While fintech vendors have long been part of the financial services ecosystem, the past decade witnessed extraordinary growth both in the number fintech firms in operation and in the breadth of their solutions. Banks are struggling to find mutually beneficial engagement opportunities with emergent fintech firms that – for a variety of reasons – are challenged to complete bank procurement processes or whose product offerings may not be commercially mature.

This report quantifies a range of initiatives by which banks, in 2018, engage these emergent fintech companies through internal innovation teams, strategic investment initiatives and through a variety of innovation lab and technology accelerator structures. The report also assesses the suitability of these initiatives for engagement with emergent fintech companies, and it identifies key criteria for success.

Published on: 16 Jul, 2018

Digital Transformation: Emergent Fintech Engagement Trends 2018 – Table of Contents

  • 1.0 Banks Undergo a Paradigm Shift
    • 1.1 The Traditional Place of Vendors in a Bank’s Technology Ecosystem
    • 1.2 The End of DIY Technology in Banks
    • 1.3 The Need for New Strategies for Technology Innovation
  • 2.0 The Fintech Landscape: Two Types of Innovative Vendors
    • 2.1 Silo-busters
    • 2.2 Disruptors
  • 3.0 How Banks Enact Changes & Opportunities
    • 3.1 Innovation Labs & Technology Accelerators
    • 3.2 Strategic Investment
    • 3.3 Digital Innovation Teams Are Means, Not Ends
  • 4.0 Appendices
    • 4.1 Glossary of Terms
    • 4.2 Table of Figures