The Big Players and Innovative Startups Need to Collaborate

June 28, 2019

Most finance experts agree that the financial sector must reinvent itself to satisfy the needs of the next generations of customers. F10 strongly believes that traditional institutions should collaborate – not compete – with more agile and disruptive FinTech Startups to achieve stronger customer focus and stay competitive in the face of globalization and digitalization.

The finance industry is under pressure: globalization, demographic changes, as well as digitalization provide opportunities for growth and require innovation to develop new products. Young, digitally savvy customers tend to be less loyal to companies or brands than previous generations and there is a tendency to perceive financial products and services as interchangeable. The new generations of clients value convenience and prefer to execute transactions remotely – if possible, without direct interaction with the company or organization. The relevance of personal relationships with advisors has dwindled, banking and insurance are not people business anymore. The clients of tomorrow focus on customized and innovative products or services. Agile Startups addressing the needs of the clients of tomorrow are entering markets that had been the exclusive realm of traditional banks, insurances and financial institutions for decades. “Advances in security and verification will enable all aspects of sales, service and delivery to be conducted online. Technology is making it easier for customers to switch banks, making relationships much less sticky”, a PwC study states. This means that banks’ target markets and are no longer “defined by its physical footprint, but by its technology, regulatory boundaries and marketing budget” and that customer loyalty is lower than ever before.

“Financial institutions must figure out how they can reinvent their products as well as services and create completely new offers to address consumer needs quickly. It has become easier than ever before to switch providers and only companies that focus on customer experience will survive in the long run”, says Thomas Landis, Head of F10. FinTech offers the finance industry new options to adapt to changing customer needs, reduce costs and make their products available to bigger parts of the world population. The innovative use of FinTech enables financial institutions to design and deliver their products and services in customer-centric and efficient ways. Artificial intelligence and Big Data facilitate more precise targeting as well as personalization of products and services, while process automatizations allow for real-time transactions and instant value transfers. FinTech is effective and powerful in various business segments such as payments, lending, investment management, money transfer, fund-raising or robo advisory and has the potential to innovate the financial world.

Collaborations combine the best of two worlds

The transformation towards more innovation may happen through partnerships with agile Startups or through acquisitions. In Switzerland, there are 333 FinTech Startups aiming to innovate the finance industry as of June 2019. Investors are showing increasing interest in technology Startups: according to an article on the IT news platform Inside IT, Swiss ICT and FinTech Startups achieved 685 million francs of investment in 2018 which is 120 percent more than in the previous year. It was the first time that emerging tech companies received more investments than their counterparts in Life Sciences .F10 strongly believes that traditional financial institutions should collaborate with new incumbents instead of competing. “We are convinced that innovative Startups and the big players need to join forces to tear down innovation hurdles”, Head of F10 Thomas Landis states. Collaborations combine decades of experience with fresh ideas and lean structures. F10 as THE HOME OF FINTECH brings FinTech, RegTech and InsurTech Startups together with established institutions in finance, banking, insurance as well digitalization. At the P3 “Product to Market” day, established Startups with market traction and revenue generation are invited to pitch their solutions in front of the F10 corporate members and have one-to-one meetings with representatives from these corporations to discuss collaboration options.

F10 as THE HOME OF FINTECH is the place where the FinTech ecosystem comes together and where valuable partnerships start. The P3 “Product to Market” program tailored for FinTech, RegTech or InsurTech Startups with market traction facilitates collaboration between Startups and renowned institutions in finance, banking, insurance and digitalization. Apply now for the next P3 “Product to Market” day taking place on Thursday, 19th of September 2019, in Zurich.

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