After many years of laser-like focus on cost cutting and regulatory compliance, banks are ready to once again invest in growth opportunities. The rapid pace of digital technology innovation has forced banks to shift their attitudes and look to the external fintech community to help push them into open innovation.
Through innovation labs, venture capital funds and hack-a-thons, financial institutions are engaging with the fintech community.
Fintech investment had a compound annual growth rate of 57% percent from $1.64 billion in 2010 to $9.89 billion in 2014.
Fintech deal value in New York grew by 32% from 2013 to a $768 million in 2014.
Where Investment is Going
Payments accounted for the largest number of fintech deals in the U.S. in 2014, while lending was the second biggest space.
Banks Step Up
In order to keep up with the significant advances in digital technology, banks are forging closer ties with the fintech community.
The financial services industry’s actions to become more digital will solidify fintech’s staying power. Financial services firms are faced with a few strategic options on their path to becoming digital: build or acquire digital assets or partner with third parties to access new technologies, ultimately to help transform the industry.
For example, the New York FinTech Innovation Lab, co-founded by Accenture and the Partnership Fund for New York City, helps early- and growth-stage fintech companies accelerate product and business development by introducing entrepreneurs to top bank and venture capital executives.