Increased Communication & Coordination Are Key to Sustaining Fintech Sector’s High Growth, According to Report from Accentu...
February 26 2018 - 8:03AM
Business Wire
Report points to best practices for
streamlining technology adoption in financial services
Better aligning communications and actions between financial
institutions and fintech companies is the next critical step to
ensuring the continued growth of the fintech sector, according to a
new report by Accenture (NYSE: ACN) and the Partnership Fund for
New York City.
Based on a survey of nearly 90 executives at financial
institutions and fintechs in New York, London and Hong Kong, the
report, “Mind the Gap: Addressing Challenges to Fintech Adoption,”
notes that while the ability to adopt external innovation is
creating competitive advantages for financial services companies,
collaboration between those companies and fintechs remains
challenging and time-consuming.
The report also shows that these organizations are not
adequately addressing their shared problems and have different
perceptions regarding what’s occurring in the technology onboarding
process between banking, insurance, asset management and other
financial institutions and their partnering entrepreneurial
fintechs.
“By taking a few pragmatic actions – including reconciling any
disconnects in the fintech adoption process and agreeing on best
practices – these organizations can help ensure the growth and
success of the fintechs, which will benefit all parties,” said
Maria Gotsch, president and CEO of the Partnership Fund for New
York City and co-director of the Fintech Innovation Lab.
The survey identified a number of disconnects between the
perceptions of financial institutions and fintechs, particularly
when it comes to regulatory concerns. For instance, 60 percent of
the financial institutions, versus only 17 percent of the fintechs,
are actively working with regulators to address concerns associated
with fintech adoption. In fact, nearly four in 10 (38 percent)
of the fintechs said they are not currently addressing regulatory
issues with the financial institutions at all. In addition, when
asked to identify the top reason that products stall during the
proof-of-concept phase, New York financial institutions cited
compliance and security issues, whereas fintechs cited a lack of
dedicated employees or funding resources and misalignment between
use cases and product roadmaps.
“The great success and rapid expansion of fintech has been so
dramatic that financial institutions and technology entrepreneurs
haven’t yet had time to merge key existing best practices with the
innovative new capabilities,” said David Treat, a managing director
at Accenture and co-director of the Fintech Innovation Lab.
“Sustained growth now requires increased communication and
coordination between financial services companies and fintechs in
areas like security and compliance, signoffs and approvals, and
resources.”
The report also found that fintechs and financial institutions
disagree on the time prospecting should take, with nearly
two-thirds (62 percent) of fintechs saying it takes longer
than four months, while 80 percent of financial institutions say it
should take less than three months. One factor both parties agree
on is the need for financial institutions to have a dedicated
point-person for fintechs to work with to ensure the process runs
smoothly. However, only about half (53 percent) of financial
institutions actually have such a point person assigned.
The report recommends specific steps that financial services
firms and fintechs take to increase adoption of fintech innovation,
including:
- developing process maps to sequence
steps and clarify roles;
- streamlining the pathway to “go” or “no
go” decisions during proof of concept;
- creating sandboxes, or safe work areas,
to avoid potential security, compliance and risk management
roadblocks; and
- emphasizing regular, timely
communications between financial institutions and fintechs.
Methodology
For the research, the New York Fintech Innovation Lab queried 87
executives at financial services firms and fintechs in New York,
London and Hong Kong regarding their views on the innovation
onboarding process. The respondents comprised 52 Fintech Innovation
Lab alumni (typically fintech CEOs) and 35 chief information
officers and chief technology officers of financial services
companies that serve as senior sponsors of the 2016 and 2017
Labs.
About the Partnership Fund for New York City
The Partnership Fund for New York City is the $150 million
investment arm of the Partnership for New York City, New York’s
leading business organization. The Fund’s mission is to engage the
City’s business leaders to identify and support promising NYC-based
entrepreneurs – in both the for-profit and non-profit sectors – to
create jobs, spur new business and expand opportunities for New
Yorkers to participate in the City’s economy. As an “evergreen”
fund, its realized gains are continuously reinvested. The
Partnership Fund Board is led by Co-Chairmen Charles R. Kaye and
Tarek Sherif. Maria Gotsch, President and CEO, leads the team.
About Accenture
Accenture is a leading global professional services company,
providing a broad range of services and solutions in strategy,
consulting, digital, technology and operations. Combining unmatched
experience and specialized skills across more than 40 industries
and all business functions – underpinned by the world’s largest
delivery network – Accenture works at the intersection of business
and technology to help clients improve their performance and create
sustainable value for their stakeholders. With more than 435,000
people serving clients in more than 120 countries, Accenture drives
innovation to improve the way the world works and lives. Visit us
at www.accenture.com.
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version on businesswire.com: http://www.businesswire.com/news/home/20180226005249/en/
AccentureMelissa Volin, +1 267 216
1815Melissa.volin@accenture.comorPartnership Fund for NYC /
Rubenstein CommunicationsKaty Feinberg, +1 212 843
8047kfeinberg@Rubenstein.com
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