Why fintech startups and traditional FI’s can become bff’s (webinar)

Join us for this live webinar on Wednesday, May 20 at 10 a.m. Pacific, 1 p.m. Eastern. Register here for free. 

Over the past half decade, the wildly exciting arena of finance technology has started giving the impression of a late 1990s dotcom boom. And it doesn’t look like the prosperity bubble is about to burst anytime soon for fintech startups.

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In fact, investor sentiments in the finance sector seem to be heavily inclined towards championing them. According to a new report by Accenture, global investment in fintech ventures tripled from $4.05 billion in 2013 to $12.2 billion in 2014.

But even though several fintech startups are proving to be investment darlings, it would be unwise to assume that they will dramatically change the status quo of the financial services sector without help.

That’s because fintech startups are currently free from the mighty hammer of regulatory bodies that tie the hands of financial institutions (FI’s). This may seem like a fintech advantage at first glance. Startups face no regulatory obstacles choking the implementation of their innovation, which means they can produce more efficient niche products and services offered by financial institutions in a fraction of the time.

But here’s the challenge: the moment these young companies get big enough to seriously impact the financial ecosystem, regulatory and compliance bodies will clamp down on them and level the playing field. As far as the David versus Goliath showdown hype surrounding fintech startups and financial institutions, the debate is rather moot.

The Way Forward

The smarter money is on financial institutions and startups becoming willing to collaborate and fulfill market demand together.

By leveraging specialized digital networking technologies, startups can optimize certain services in the financial value-chain where financial institutions fall short. If financial institutions partnered with them as data infrastructure providers, particularly for customer accounts, the service quality would improve by leaps and bounds. And with the right attitude and integration of infrastructure, financial institutions and fintech startups can make a truly game-changing impact on the market built on mutually enabled efficiency.

“When you see large U.S. banks working with Apple to bring a product to market, you see that we can all play a role in the ecosystem,” said Vineet Malhotra, managing director, Canadian Imperial Bank of Commerce (CIBC).

Making innovation mainstream

In his “Disaggregation of a Bank” post, Alexander Pease, a VC at New York-based Union Square Ventures, illustrates the innovation leaders in this digitally-enabled paradigm shift.

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He maps some of the top fintech startups that have successfully mastered the art of sweetening pieces of the financial services pie. Here are some of the top fintech startups making waves in buzzing niche segments of the financial services value chain:

• P2P lending – Lending Club, Prosper, and Auxmoney
• Wealth management – SigFig, Learnvest, Covestor, and Secondmarket
• Equity crowdfunding – AngelList, CircleUp, Realty Mogul, and Upstart

Shift in software service strategy

The fintech revolution is a digitally driven movement. So, it’s no surprise to see startups emphasize the importance of improving application programming interfaces (APIs). After all, APIs have developed as a primary way that one web-based system communicates with another.

The independence from the constrictions of legacy systems enjoyed by digital firms is a major reason why they are able to compete so successfully.

Yodlee is one of the few contenders vying to be the heart of a new digital financial ecosystem and recognizes the potential waiting to blossom in this market vacuum.

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Whether you’re running a traditional financial firm or an emerging startup, you can develop customized applications offerings like this. It simplifies categorization of transactions, provides fine-tuned data aggregation, and protection from fraud.

Financial services and the technologies that make it tick are quickly changing the landscape of financial services. The new players are going to have to think beyond sexy UI and deliver a fundamentally valuable product/service that offers more value to customers than their financial institution relationships.

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Tune into the live webinar to learn how digital fintech startups and traditional financial institutions can leverage the strengths of one another for maximum benefit.  Register here for free.

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What you’ll learn:

• Why fintech is such a hot investment globally
• What financial institutions have that fintech startups need, and vice versa
• How financial institutions are evolving their software service strategy
• How to innovate legacy banking systems and create joint collaboration with fintech startups
• The future of mobile payments and digital money management

Speakers:

Collin Canright, Principal, Canright Communications Collin is a consultant and principal at Canright Communications, a Chicago-based marketing communications firm, serving clients in banking, trading, technology, and professional services. His articles on fintech, payments, ecommerce, and banking currently appear in Independent Banker magazine and his blog, FinCom. Collin has worked in finance and technology for nearly 30 years as a journalist, marketer, and technical writer.

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Jason Henrichs, Partner, The Kinetic Group Jason is the Managing Partner of the Kinetic Group, Co-Founder of FinTEx Chicago and part of the startup ecosystem as a founder, board member, advisor, mentor and investor. Jason is active as a mentor across the TechStars network. He’s previously helped found PerkStreet Financial, Britemoon and US Genomics. He is an investor in Blacksmith Applications, Blueleaf, Fundly, Helpscout, Seahorse Biosciences and Zagster.  He is also the past President of the Massachusetts’s Service Alliance and advisor to City Year.

Jason O’Shaughnessy, VP of International, Yodlee Interactive  Jason has more than 25 years’ experience in business development, working with high-tech businesses that range from large corporations to innovative start-up ventures.  Jason now currently heads up Yodlee Inc’s Business Development team for its International markets. Jason established Yodlee’s International operations in 2003, and has since grown Yodlee’s footprint in more than eight countries across Asia and EMEA.

Jesse Podell, Co-Founder & COO, TechDay Jesse is Co-Founder & COO of TechDay, the major startup event series.  TechDay’s flagship event, NY TechDay took place April 23rd in New York City and had over 13,000 registered attendees and over 450 startups.  TechDay also holds events in Washington, D.C. and Los Angeles, with several more cities will be announced in 2016.  In 2013 and 2014 Jesse was a co-organizer of the largest fintech meetup group in the country, NY Fintech Startups, with over 3,500 members.  Prior to working with startups, Jesse spent twelve years in trading and business development roles on the buy and sell side.

Moderator:

Evan Schuman Evan has covered IT issues for a lot longer than he’ll ever admit. The founding editor of retail technology site StorefrontBacktalk, he’s been a columnist for CBSNews.com, RetailWeek, Computerworld, and eWeek.

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This webinar is sponsored by Yodlee.