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April 12, 2016updated 21 Oct 2016 5:01pm

The Financial Services Industry is byzantine and needs disrupting through fintech start ups

Julian Skan, Accenture MD overseeing the Fintech Innovation Lab London spoke with CBR about this year’s programme and the 15 firms who made it through to the final

By Sam

The Accenture Fintech Innovation Lab Finals take place in London where 15 fintech start-ups have the opportunity to engage with potential backers and customers from the banking and financial services industry.

The objective of the Accenture Fintech Innovation Lab is to engage investors and start-ups but also to push the financial services industry into recognising its own changing requirements cannot be met through internal solution development.

Now in its fourth year, Accenture Fintech Innovation Lab firms have to date raised $30m in investment. And what is encouraging for

Julian Skan, Accenture MD who runs the London programme is the rapidly rising standard and maturing nature of start ups which enter the programme.

It improves each year. In terms of problems they want to solve this year’s entry list is definitely comprised of a far more mature set of companies, he says. This maturity extends to the make-up of the businesses themselves and to the objectives and business acumen of those running these companies.

In product and solution terms entrants are much further along with many having working development units to build out the product and to identify the problem or opportunity it addresses.

"They have been more prepared to address the problem, not to be solution focused. And finalists have demonstrated they are prepared to change course."

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"One of the biggest gaps we found in the past was zero sales engine. Every finalist this year already has a better sales front end," says Skan.

And on the investment side they are more advanced in the type of advice they need on their options.

"That means that the confidence for banks to talk to them is much greater. We cut out the nutters and the crap," says Skan.

The selection process, how to get to the final

This year’s technical context was retail and investment banking two of the most fintech disrupted areas of financial services.

This year’s 15 finalists when through a rigorous selection process.

Says Skan, we feed them out to the sixteen banks for scoring with the criteria including is this relevant? Can it be adopted? Can it benefit from the programme? Is it an idea or a product?"

And there is filtering around what the industry is interested in. That filtering brought the initial entry pool down to a selection of 45 companies.

A series of selection days saw 16 banks represented with each of the 45 firms making a presentation, engaging in a discussion and participating in a Q+A which Mr Skan says was tough and very open.

"It was a tough selection process to the get to the 15 and there was a lot of quality," he says.

Why is this different to other programmes?

Says Mr Skan, the purpose of the Fintech Innovation Lab is to disrupt. To offer a ‘punch in the stomach’ to push collaboration and force the industry to focus. Having multiple banks involved keeps everyone honest, he says.

The secret to understanding the financial services industry is that it is byzantine, he says.

An original objective of the programme was to make the banks take seriously the threats and opportunities for improvements of fintech. The intent of the programme was to wake them up and look at industry solutions collaboratively instead of individually.

On one particular issue the dial is very much in the red and that is speed of adoption. There had been an assumption among the banks that they can adopt and use fintech over time. But they saw it was not happening fast enough. If the processes were not changing someone would do it better and faster.

Says Skan, "The benefit for Accenture has several layers. First is learning. What’s actually happening in the industry? Are we really getting a finger on the pulse? Also it is about learning to help incumbents disrupt themselves. And Accenture gains brand value because hopefully people in the financial services industry will see we’re genuinely industry focused."

Search Fintech Profile on CBR for more profiles of many of the 2016 finalists.

 

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