Banks can benefit from opening up to the speed of innovation offered by financial tech start-ups, according to Citi’s EMEA CIO Alistair Grant.
Speaking at the investor day for the FinTech Innovation Lab, Grant said that large banks can stay ahead of the fast pace of technological change in the financial sector by engaging with start-up companies which create a ‘shop-front’ of innovation.
The Accenture-led FinTech accelerator has been running for 12 weeks, with seven finalist start-ups gaining access to mentoring and support from large financial sector companies. The fintech start-ups, selected from 60 applicants, were provided with office space at the newly launched Level 39 accelerator space in Canary Wharf, with the project culminating in today’s investor day at London’s City Hall.
Grant said that by engaging with the start-up community, Citi can increase its ability to quickly respond to industry changes.
“It can take quite a long time to develop in-house capability,” he said. “The benefit we get here is that the start-ups have done the hard work of turning these ideas and concepts into something tangible, so we can take the product straight to pilot and start testing as opposed to designing it ourselves.”
Grant pointed to one of the companies presenting, Digital Shadows, which has attracted the attention of a number of financial institutions. With banks and their employees embracing social media, as well as supply chains growing for many banks, data being made publically available is increasing rapidly. In response, Digital Shadows has developed a Big Data analytics service which alerts banks to the online information that can pose a potential security threat.
“Digital Shadows was of real interest to us – the whole threat to our perimeter is hugely important,” he said. “Cyber attackers are using more sophisticated hardware and more sophisticated software to try and disrupt the service that banks offer, so we have to respond to that.
“A company like Digital Shadows monitors the depths of the internet and gives us advanced warning of certain potential threats, which we can then do something about. That is why we were interested in them and they seem to have a pretty good offer in that space.”
A number of other companies were also presentating at the event, with BehavioSec, CallTrunk, Growth Intelligence, Waratek and the Open Bank Project exhibiting software services to a number of financial sector companies, including banks such as Barclays involved in the mentoring scheme as part of FinTech project.
Also speaking at the investor day, Richard Lumb, group chief executive of Accenture Financial Services, highlighted the opportunity for innovative companies to benefit from the wholescale changes that are impacting on financial services firms.
“Although it is a tough time in the financial services industry, it is an exciting time to be working in financial services because times of change like this can also be times of incredible opportunity,” he said.
“The industry is emerging from a period of enormous adjustment. The landscape is less forgiving than before and less profitable for traditional business models, but never more promising for new innovation and new ways of working.”
Deputy Mayor for London, Kit Malthouse, added that the FinTech Innovation Lab has helped build on the successes of Tech City, and highlighted the need to support the development of technologies which can help preserve London’s reputation as as world-leading financial centre.
“We are aided by the massive rise in Tech City, and the growth of incubators such as Level 39," he said. “We want to play a part in anchoring some of these new technologies and innovations here, particularly in areas of strength already, so bringing financial tech and financial services together hits our sweet spot.”