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The Big Transformation Challenge for Finance

How to make Fintech work for big institutions and fast

Entrepreneurial environments are usually unstructured and chaotic in ways that reflect the sense that anything is possible. They contribute to transformation but nobody can predict how. Within five years of Apple becoming the dominant player in mobile, for example, it is likely that up t a million new companies were formed to create apps,somewhere in the world.

This creates a sense of vibrant opportunity. The Fintech community is very different. Whereas apps developers post-Iphone's launch were part of a global trend towards smaller companies doing innovation on a major platform, the relationship between Fintech and banks is still unclear.

There is not the immediate synergy that a business platform gets from its ecosystem. Nothing wrong in that - it has taken ARM Holdings many years to fashion its ecosystem in mobile chip design. But there needs to be more clarity on how this some synergy will be created and what its purpose is going to be. in financial services.

The current mood seems to be that banks and Fintech will be collaborative. But this introduces a range of new issues that no sector has yet addressed:

How do banks judge what is a good Fintech, suitable to become a collaborator?

How do banks judge the prospect of a company's survival or conversely its ability to scale to meet bak-wide requirements

Come to that how do banks decide which part of their processes are best served by an outside agency?

These are the kind of questions we have set out to answer at the Financial Innovation Hub. So far we have nine bank partners and we've reviewed about a dozen Fintechs as of the time of writing.

But leaving side all the detail the big picture is this. Banks look like they are going to create Fintech ecosystems more along the lines of an Arm Holdings than an Apple. TO go that route calls for data, and the more the better, on Fintech capabilities.

That's what we measure in our Scorecard.

The effects of measurement are to give Fintechs a barometer of where they are in their development compared to peers; create a standard way for banks to assess Fintechs; and help professionalise the construction of new ecosystems that will really make a difference. To do that we are exploring Fintech clusters that address specific bank challenges..

 

This is doubly important. It matters to banks and Fintechs. More than that it matters because normal rules of entrepreneurship do not apply in banking. This is not free, chaotic, primordial entrepreneurship. it is a deeply regulated, understandably cautious industry that needs to change the way it does business with the maximum possible access to the right intelligence. Clusters, Fintechs capability intelligence and comparative data are what we provide.

The effects of measurement are to give Fintechs a barometer of where they are in their development compared to peers; create a standard way for banks to assess Fintechs; and help professionalise the construction of new ecosystems that will really make a difference. To do that we are exploring Fintech clusters that address specific bank challenges..

This is doubly important. It matters to banks and Fintechs. More than that it matters because normal rules of entrepreneurship do not apply in banking. This is not free, chaotic, primordial entrepreneurship. it is a deeply regulated, understandably cautious industry that needs to change the way it does business with the maximum possible access to the right intelligence. Clusters, Fintechs capability intelligence and comparative data are what we provide.

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