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There are two kinds of innovation with completely different motives. The first type of innovations is aimed at supporting the existing system, and the second - at its destruction.
Danny Gilligan, CEO of Australian venture capital firm Reinventure, argues that traditional financial institutions are not interested in the second way of modernization, even if it can bring positive changes to finance. Because such innovations can destroy the business of banks.
This statement has become a key point in Accenture's research on the future of FinTech and banking.
Scripts
The report describes two scenarios for innovation in financial institutions.
In the first scenario, banks are presented as passive organizations, which an increasing number of users consider a relic of the past.
However, the report says banks see short-term benefits in such innovations.
Consumers
If the bank is unable to transform short-term projects into results that will meet the needs of clients, they will question the need for such a financial institution.
Analysts warn that banks should not treat modern technology as an end in itself. It must be remembered that when introducing innovations, the bank must first of all provide high-quality service to its client.
Startup incubators
Financial institutions have chosen to take this approach to innovation: simultaneous forecasting and response.
For the purpose of forecasting, banks create incubators to support startups. This eliminates the need to compete with young entrepreneurs. If a startup that is not covered by the support program succeeds, the bank acquires it before it can achieve high capitalization.
Last month, Barclays opened registration for the third season of its international startup assistance program. Visa Europe has set up its own innovation hub, which is currently attracting startups in three of Europe's most active cities in terms of fintech. These are London, Berlin and Tel Aviv.
Engaging third-party developers allows banks to focus on improving the quality of customer service.
Ultimately, to some extent, banks are really focused on innovation. But not because they are afraid that their absence will lead to collapse. And in order to add missing services that startups already offer and monetize them.
In addition, banks see innovation as an investment in the future. For example, Barclays became the first bank in the UK to use Bitcoin technology.
Danny Gilligan, CEO of Australian venture capital firm Reinventure, argues that traditional financial institutions are not interested in the second way of modernization, even if it can bring positive changes to finance. Because such innovations can destroy the business of banks.
This statement has become a key point in Accenture's research on the future of FinTech and banking.
Scripts
The report describes two scenarios for innovation in financial institutions.
In the first scenario, banks are presented as passive organizations, which an increasing number of users consider a relic of the past.
The second scenario assumes a more aggressive policy of banks in the financial services market, the creation of services that can delight customers.
However, the report says banks see short-term benefits in such innovations.
Consumers
If the bank is unable to transform short-term projects into results that will meet the needs of clients, they will question the need for such a financial institution.
Analysts warn that banks should not treat modern technology as an end in itself. It must be remembered that when introducing innovations, the bank must first of all provide high-quality service to its client.
Startup incubators
Financial institutions have chosen to take this approach to innovation: simultaneous forecasting and response.
For the purpose of forecasting, banks create incubators to support startups. This eliminates the need to compete with young entrepreneurs. If a startup that is not covered by the support program succeeds, the bank acquires it before it can achieve high capitalization.
Last month, Barclays opened registration for the third season of its international startup assistance program. Visa Europe has set up its own innovation hub, which is currently attracting startups in three of Europe's most active cities in terms of fintech. These are London, Berlin and Tel Aviv.
Engaging third-party developers allows banks to focus on improving the quality of customer service.
Ultimately, to some extent, banks are really focused on innovation. But not because they are afraid that their absence will lead to collapse. And in order to add missing services that startups already offer and monetize them.
In addition, banks see innovation as an investment in the future. For example, Barclays became the first bank in the UK to use Bitcoin technology.
