Digital revolution or redefinition? This Accenture report shows whether and how the banking world meets the FinTech challenge.
The FinTech report is based on a global worldwide financial industry survey taken by CB insights in conjunction with Accenture’s survey of 25 innovation managers at banks.
Global investment in FinTech ventures tripled to $12.21 billion in 2014, clearly signifying that the digital revolution has arrived in the financial services sector. It is still unclear whether this presents more of a challenge or an opportunity for the incumbents in the industry.
Investment in financial-technology companies grew by 201% globally in 2014, compared to 63% growth in overall venture-capital investments, confirming this sector as a hot ticket. Expectations for new digital start-ups in the industry continue to swell, with the amount of money flowing into first round of investments alone growing by 48%.
How do banks work with this new challenge? Established financial services players are starting to take bold steps to engage with emerging innovations. The Accenture report shows three different directions of behavior:
Group 1: Open Innovators. it involves opening up the organization’s own intellectual property (IP), assets and expertise to outside innovators to discover new areas for growth. Credit Agricole, Spain’s BBVA, Goldman Sachs and Germany’s Fidor Bank are regarded pioneers in the field.
Group 2: Collaborators. The concepts of collaboration – or “co-innovation is favored by three-fifths of respondents that support the “Digitally Reimagined” scenario for the future. It seems lucrative as a group of financial institutes together hone the skills of the startups until maturity. Accenture and Australian financial service provides lead the way. Their innovation labs are supported by many players which observe and support the growth process and helping them to overcome organizational challenges.
Group 3: The Investors. Corporate venture arms are used by one-third of the surveyed bankers and further third expect to launch one in the next two years. American Express, BBVA, HSBC, Santander und SBank are some examples. They invested $100 million in FinTechs over the past four years. Axa setup a €200 million fund for start-up promotion.
You may download the Accenture study here.