Disruption to the financial services market is coming from several different angles, from regulations, to customer demand for change and cost. These factors have come together to aid the introduction of fintech companies into the market.
Fintechs have appeared and started to disrupt numerous areas of finance, aided by a customer first approach and backed by technology. Fintechs don’t have the legacy that the incumbents have and so are able to quickly roll out new services and features as customer requirements change.
While this agility is a vital factor behind the speed at which disruption is happening, another equally important factor is the support that they are receiving from consultancy firms.
Although many consultancy firms work with banks, they are also working with the fintechs that are disrupting their businesses.
CBR highlights five of the leading consultancy firms and what they are doing to nurture fintech talent.
Accenture has been at the forefront of pushing interest in financial technology and has produced several pieces of research about trends developing.
In addition to educating through research, the firm also runs several Fintech Innovation Labs around the world.
The purpose of the innovation lab is to give early and growth-stage companies help to develop, trial, and prove their proposition by working alongside its consultants and with banks.
The lab is a 12-week mentorship program which has seen 59 start-ups participate in it since 2012 and $200m in funding to date. The lab is also supported by 29 financial institutions worldwide. CBR spoke to a number of the most recent start-ups selected by the lab.
Partners of the lab include Barclays, Lloyds Banking Group, JP Morgan, Nationwide, Santander, and more.
The company doesn’t charge a fee to those that apply to join the program and the objective is to not only engage investors and start-ups, but to also help the financial services industry to identify that its changing requirements cannot be met solely through internal development.
Capgemini has been taking a different approach to pushing the advancement of fintech, although it is also producing lots of research to show the development of trends.
The firm has been vocal about the rise of fintech but it has approached the subject more from a services and technology point of view and a focus on blockchain.
Blockchain, the distributed ledger technology that has been promised to revolutionise banking, has increasingly been focused on by Capgemini.
In April the consultancy expanded its global team of blockchain specialists to 100 by the end of the year.
The approach from Capgemini appears to be one of collaboration with fintechs in order to develop blockchain solutions for areas such as micro payments, syndicate loans, asset management, and claims handling.
The idea is for this technology to be developed with fintechs and then implement them as a preferred systems integrator.
The benefit for fintechs is that they boost their knowledge and industry access by working with one of the biggest consulting firms in the world.
Like Capgemini, Deloitte is more specifically focusing its efforts on blockchain technology, although it also supports other areas of fintech development.
The company has been working on global plans to set up a network of labs around the world based around blockchain, called ‘The Grid’.
Recently it revealed plans to create a financial services blockchain lab in Dublin which will be tasked with developing blockchain proofs-of-concept into functioning prototypes that are ready to integrate.
Deloitte has also been proactive in partnering with blockchain start-ups as it looks built working blockchain prototypes.
Partnerships with BlockCyber, Bloq, ConsenSys Enterprise, Loyyal, and Stellar are part of a wider plan to advance the market penetration of blockchain technology.
For Deloitte the benefit is that it can be at the forefront of developing a technology that could help to revolutionise financial services. The start-ups it has chosen to work with, benefit from deeper pockets and a better chance at breaking into the market.
EY is the only Big Four member of Innovate Finance, the world’s largest association for fintech. As a member the firm seconds members of staff into Innovate Finance member firms for three month periods in order to help them to accelerate programmes and start-up growth.
The approach differs slightly from the previously mentioned firms but the goal is essentially the same, to collaborate and help fintechs grow and break into the market.
EY has identified that fintech will be central to the future success of the UKs financial services and has set about developing the skills that are need to help fuel growth.
The work it is doing as part of Innovate Finance sees it collaborate on research projects on emerging fintech trends such as open payments, financial inclusion, regtech, and blockchain technology.
The consultancy firm is also a supporter of fintech accelerator programmes around the world.
KPMG is active in highlighting the wave of digital disruption that is hitting the financial services industry. It has been doing this by showcasing the top companies in its Fintech 100 report which looks at the 50 leading established players that are creating change within financial services, and 50 of the emerging fintechs of tomorrow.
The firm has been adding a touch of gamification to its support of fintech disruption with the creation of the Fintech Innovation Challenge, which it launched with Matchi.
The challenge aims to find six fintech innovations and match them with multiple financial institutions at the Fintech Innovation Summit which it hosts in London.
Like the others mentioned, the end goal is the same, even if the method of getting there varies. Basically the idea is to promote innovation between fintech firms and financial institutions.
Through collaborative work and education the consulting firm hopes to help use its market knowledge and connections to forge relationships between fintechs and financial services organisations.