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Published 29 July 2020
The Whitecap Bristol and Bath FinTech Ecosystem report earlier in 2020 highlighted the success of the sector in the region. One of the perhaps more unexpected findings in the report was that the dynamism of the fintech sector was due to the strength of the region’s creative technology heritage, rather than the well-established presence of its financial services institutions.
A group of large and emerging players in the sector came together, in July 2020, for a roundtable discussion to examine the reasons behind the limited collaboration between fintechs and established financial services organisations, the benefits of collaboration and how the exchange of ideas could be achieved. COVID-19 brought the roundtable together in a virtual forum and has also seen more cautious and conservative attitudes to technology being overcome. Can COVID-19 be the accelerator enabling more rapid digitalisation? These elements, together with the main threads of the roundtable discussion, will be the basis for further examination in our fintech community. Alan Pratt, partner at international law firm DAC Beachcroft, chaired the discussion.
Our roundtable participants agreed that collaboration could accelerate better customer experience and that better networks, stronger profiles and greater understanding were important elements in achieving this. Practical ideas in support of partnership working included early involvement in product development to align approaches, fintechs acting as mentors in larger organisations, pitch days and demonstrations.
One of the biggest barriers to collaboration identified in the discussions was finding the right people to engage with at the larger financial institutions. From the fintech perspective, engagement with a financial institution seems to depend on whether you have the right personal network to meet the right stakeholders and understanding how best to engage with those stakeholders. Stronger profiles are clearly beneficial in this respect. Financial institutions could increase their involvement in fintech networks and events, while fintechs could continue to increase awareness of their brand, their product and the problems they’re solving. There is also a desire for smarter processes that achieve more rapid and relevant access.
A number of participants highlighted the importance of networks and events (such as those organised by FinTech West) in enabling the growth of these personal networks. It was felt that the South West fintech ecosystem would benefit from more powerful promotion, both regionally and nationally, and that fintech networks and events in the region could be better publicised.
Value exchange and understanding were seen as critical behaviours for collaboration. For effective collaboration with a financial institution, it’s crucial that fintechs really understand the customer journey and the particular pain point for that financial institution, and can demonstrate really clearly how their product addresses that pain point and benefits the financial institution and customer. It was recognised that financial institutions could help this process by being clearer and more open with fintechs about pain points and roadmaps.
Financial services regulators have recognised that the way forward is more about large organisations achieving digital transformation with the help of external parties, rather than needing to do this all internally. It was acknowledged that financial institutions still have work to do when it comes to creating spaces for experimentation. A hub (whether physical or virtual) was seen as an important facilitator, creating a forum for like-minded people to come together and exchange and explore new ideas and innovations. From the perspective of financial institutions, the landscape has shifted as a result of COVID-19 and so this is likely to lead to more or faster collaborations with fintechs.
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