Fintech New York: Partnerships, Platforms and Open Innovation

Fintech New York:

Partnerships, Platforms

and Open InnovationReport released at the Fintech Innovation Lab’s

Fifth Annual Demo Day Event

New York, New York

Opportunity: The rapid pace of digital

technology innovation has led Banks and other FIs

to look towards the financial technology (Fintech)

community to help drive innovation from outside

and within their organizations. This approach is

referred to as Open Innovation

• The goal: create a broader value proposition for

customers that includes both financial and

nonfinancial services, delivered in a ‘magical’

customer experience

• The need: new technologies to help cut costs,

integrate with new services, comply with regulations

and security needs, and compete more effectively

with new digital disrupters entering the market

• The solution: Platforms, partnerships and open

innovation

The Financial Services Industry: Embracing the Potential of Fintech

Copyright © 2015 Accenture and Partnership Fund All rights reserved. 2


• The value of Fintech investments in the

U.S. soared to $9.89 billion in 2014, up

from $3.39 billion in 2013

• Over the past five years, Fintech

investment has had a compound annual

growth rate of 56.6 percent, from $1.64

billion in 2010

• This 191 percent increase dwarfs the

increase in 2013, when Fintech deal

values in the United States climbed 68

percent

• In New York, Fintech deal values grew

by 32 percent in 2014, to a new high of

$768 million

Fintech Investment in the U.S. Nearly Tripled in 2014


• Hot areas for Fintech investment in 2014: payments, lending, trading technologies, and wealth

management

• Opportunities in B2B payment space: reducing friction in cross-border invoicing and building

new tools for payments within the sharing economy

• Trends in lending: disruptive companies have

filled the void as banks have pulled back from making loans

• Automated advisory: For less complex protfolios,

automated investing is replacing traditional, labor-intensive

processes with algorithms, bringing more sophisticated

advisory services to a historically underserved sector

Where the Money is Going


New York is Attracting More Venture Investments

Into Wealth Management and Markets

• More than four of every 10 (42 percent)

Fintech deals in New York in 2014 were in

one of the previously mentioned hot areas:

payments, lending, trading technologies,

and wealth management

“For Fintech entrepreneurs, New York provides key advantages that no other city can match – close

access to potential customers and a deep talent pool

of individuals with an intricate understanding of the financial services industry.”

— Maria Gotsch, President and CEO of the Partnership Fund

for New York City and Co-founder of New York Fintech

Innovation Lab

Copyright © 2015 Accenture All rights reserved. 6

Next Big Trends for Financial Services FirmsMore Sophisticated Advisory Services to a Wider Variety of Clients

• Paradigm shift: from managing customer relationships via one-to-one communications to

automated advisory services

• Algorithms: for less complex portfolios, replacing traditional, labor-intensive processes with

automated algorithms that determine the best portfolio for the investor

• Automation: established financial advisory firms (e.g., Charles Schwab and Vanguard) are

embracing automated investing advisory as a complement to their traditional services

“Even very sophisticated institutions are just now starting to realize the depth and complexity of Fintech, and they want to

do more.” – Robert Gach, Managing director of Accenture Strategy Capital Markets and co-founder of the New York FinTech Innovation Lab


Next Big Trends for Financial Services FirmsDistributed Ledger, Cybersecurity and Operational Transformation

• Blockchain: strong growth is expected over the next 18 months in this underlying distributed-ledger

technology that currently supports Bitcoin

o As a stand-alone technology, Blockchain has the potential to help banks, credit card companies, and clearinghouses

collaborate, creating safer, faster accounting and optimizing use of capital by reducing counterparty risk and

transaction latency

• Cyber security: investment is also likely to increase significantly in the coming year, especially in

light of broad media attention surrounding recent large-scale data breaches

• Operational transformation (insurance): facing digital disruption, innovative startup companies

are working with insurers to help transform their operations

o U.S. insurers lose $5.8 billion annually as a result of consumers switching carriers

o To address a challenging customer base, insurers have started to tap the innovations within the Fintech community

o More than four in 10 insurers (43 percent) are either planning to buy, or already have bought, a Fintech startup



Conclusion: Complete Digital Transformation of Financial Services is Imminent

• We are in the midst of a major disruption in the financial services that will see increasing adoption and

evolution of disruptive FinTech solutions

• Application programming interfaces (APIs) and similar gateways for quick, reliable and secure

information exchange between organizations will enable banks to build out a diverse ecosystem of

partners, bringing a broader range of products and services to their customers

• Banks and insurers are now aggressively pursuing digital transformation in various forms,

from partnerships, to accelerators and innovation labs, to acquisitions to strategic investments

• The industry is shifting its focus, moving away from large, mandated tech investment to meet regulatory

requirements to investing in disruptive digital technologies that embrace new ideas and create fast-

moving centers of innovation


For More Information

Read the full report: Fintech New York:

Partnerships, Platforms and Open Innovation

Visit: http://www.fintechinnovationlabnyc.com

/11139.aspx


http://www.fintechinnovationlabnyc.com/11139.aspx

Fintech New York: Partnerships, Platforms and Open Innovation

Economy & Finance

Transcript of Fintech New York: Partnerships, Platforms and Open Innovation