Nationwide and Santander will be supporting next year’s FinTech Innovation Lab in London, which is now open to receive applications.
The two banks will join 14 financial institutions, including RBS, Lloyds, Barclays, Citi, HSBC and Goldman Sachs, in mentoring financial services technology (fintech) entrepreneurs during the 12-week programme to grow early startups.
Startups chosen for the programme will be creating innovative products and services in the areas of big data analytics, mobile, payments, risk management, security, compliance, social media and collaboration.
The Accenture FinTech Innovation Lab is also supported by the Mayor of London, the City of London Corporation and the UK’s innovation agency, the Technology Strategy Board. The closing date for applications is 14 September 2014.
Tony Prestedge, chief operating officer at Nationwide, said the Lab is a great way for the building society to support the culture of innovation.
“Nationwide has a strong history of innovation – both as a leader in online banking and more recently in areas such as mobile banking and digital wallets,” he said. “Supporting the Innovation Lab is one of ways we are investing in, and implementing cutting-edge technology to improve customer choice and service. I’m excited to be involved in the development of the next generation of technology.”
Santander’s UK executive director, Victor Matarranz, said the bank has recently launched its own fintech fund to work with smaller organisations.
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“We know how important their work is and we are very proud to be involved in this mentoring program, which will provide invaluable experience and access to industry expertise for these fintech entrepreneurs,” he said.
Working with early stage startups is becoming a trend in financial services, as large banking institutions are looking for agile approaches to new technologies.
“Investigating technology and new startups is absolutely essential,” Alistair Grant, CIO for Europe, Middle East and Africa at Citi, told Computer Weekly last year. “It keeps our own people aware of what’s going on, on their toes and developing in a more agile way.”
Citi finds startups are more productive to work with as they can get products to market quickly without the constraints of regulatory controls and internal financial processes.
“We have the talent and capability internally to do it, but because we have to make sure our products from day one are very robust and combined with all regulatory controls in our various geographies, it can sometimes take us much longer. It’s a great shortcut for large corporates to get involved with startup companies which have raw talent, great ideas and solutions we can help them develop,” says Grant.
“They think of it from getting the solution right, they have an idea, and quickly develop – and they do quickly develop. As an organisation we can see those, and from across a number of startups almost cherry pick the solutions we’re interested in.”
Seeing large banks move towards startup companies has meant that big traditional suppliers have had to change their ways of working.
Big suppliers in the fintech space are becoming more agile because of competition from startup technology companies.
Fintech startups are hot on the heels of the traditional IT suppliers, who are having to change the way they do business with banks, said Derek White, chief design officer at Barclays, which has just opened its own startup accelerator.
“They also recognise the need to work with startups, as the potential threat to the large partners becomes more and more real,” he said.
The large suppliers are even asking Barclays for advice on how to become more agile after the bank launched its mobile service PingIt in just seven months.
“We have articulated the model as to how we acted as a startup internally to disrupt ourselves and we’re starting to industrialise that,” said White.
“I can count five large technology companies all of the names you would imagine have come to Barclays and have asked how we are doing it,” he said.
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