Incumbents in the financial services industry are investing in fintech start-ups in order to develop the next big customer-friendly innovation. It’s an arrangement that benefits all concerned.
The financial services sector has seen a surge in innovation over the last 10 years. Take mobile banking, which has revolutionised personal finance; or contactless payments, which now account for the majority of debit card payments.
“There has been an immense service shift towards digital technology and, crucially, mobile technology in financial services,” agrees Emma Huntington, who leads Innovation and Venturing at Nationwide building society. “We in the industry have to use new technology to respond to the changing behaviours of our members, to meet, and hopefully surpass their expectations and needs.” Britain’s biggest building society has just launched a new £50m venturing fund that will see the mutual invest and partner with early stage start ups.