Are bank innovation hubs just showcasing and should fintechs go direct to business units?
I had a conversation with a fintech recently who was stressing the importance of speaking directly to the business units which could benefit from the technology you are offering, rather than the fintech/startup programmes they offer.
Most of the big banks have programmes for startup tech companies, where they invite fintech to come and work within their own ecosystem. But according to one fintech this is not the best course of action as the people heading these programmes will have targets set for them about how many fintechs they need to sign up.
The point he was making is that these people don’t always work in the parts of the business that might use the technology a startup is developing and therefore might just chose the technology that looks most funky to showcase it.
It is a bit 1980’s, but could it be better for a startup to use other means to get the attention of the write business unit manager. Sending them their favourite Cuban cigars etc.
On the other hand banks are pretty conservative and have strict rules of engagement. I spoke to another contact within the traditional banking sector and he told me that if a fintech has a product that can really offer banks something special, the banks will find them and “be all over them.”
He also warned it could be risky going direct to business units.
“I guess a lot of startups don’t like the incubation programmes because they are very competitive and only take a few on” he said.
He advised fintechs to approach the designated people at banks. “The first port of call should be the contact point the bank has created because if you go around this it might annoy the banks and it could backfire.”
But showing initiative might be a good idea. Should you wait outside the office and invite a business unit head for a drink or should you stick to the predefined route?
Let me know what you think and tell me about some of the methods you use to contact the banks, as well as how successful they have been.
Being part of an innovation programme can certainly pay off. Take Wrisk, who appeared in part three of my Fintech Interview series.
Wrisk, which is an insurtech, has already announced a big enterprise customer in the form of BMW in the UK. BMW’s UK arm is using Wrisk to offer insurance policies to customers of BMWs and Minis when they buy through its UK dealers. It replaced Allianz as BMW’s insurance supplier.
This all came out of Wrisk being on an incubator programme run by BMW Financial Services UK.
It is a tricky choice to make but as my traditional banking IT contact said “If they are genuinely good with a good product the banks will find them, invest in them and use their offerings.”