Where will the next innovation in financial technology come from? No offense, but not from banks.
That's because banks take their sweet time to embrace anything new. Their innovation reticence has solid reasons behind it, including compliance concerns. But it also explains why their pain points change little from one year to the next.
Regardless of their speed in transforming, the need to stay aware of change and new threats should remain top of mind for any bank. At least that's the belief of Swift's innovation offshoot, Innotribe.
"The point is you have to see [disruption] coming," Konstantin (Kosta) Peric, co-founder of Innotribe, tells BTN.
Finding ways to connect startups to bankers is one of the goals of Innotribe, which hosted a regional challenge event Thursday that did just that.
In a Finovate-esque format, startups were allotted six minutes to pitch their companies to an intimate audience of press members, bankers, venture capitalists and technologists in Manhattan. Then attendees were allowed a few minutes to question those pitches. Of the 200 applicants that tried to get their few minutes of demo-ing in front of financiers in New York, only 14 startups were chosen to strut their stuff in front of representatives from Bank of America, MasterCard, and Capital One, among others.
When the presentations ran long, the sound of a ticking clock was heard. "There is no bomb exploding. It's fine," the emcee reassured one of the first demo-ers to hear the sound.
The main technology theme that emerged from presenters was mobile banking security. XYverify, Voicetrust, and Zighra were three of the companies that offered banks ways to shore up mobile security. That theme also emerged at Finovate in San Francisco this spring.
Competing companies were broken into two groups: startups and innovators. The startup winners have been invited to Sibos, Swift's annual conference, to compete for the cash prize. One of the startups was Realty Mogul, a crowdfunding site for real estate deals. A second was P2P Cash, which provides technology that allows cash to be sent to and received from bank accounts using Swift standards. The startup competed in the Innotribe contest last year. A third selected startup was XYverify, which has developed location-based geofencing technology designed to help banks authenticate their customers. Like P2P Cash, XYverify competed in the Innotribe challenge last year.
A startup that didn't get recognition from the crowd, but struck a chord with me, is GoodApril. The company, which builds on top of Intuit's aggregation service, designs tax software that's similar to personal financial management software for self-employed individuals.
Beyond the startup competition, Innotribe, which wants to create events where attendees don't fall asleep, as Peric put it, hosted five innovation chat rooms with a setup the emcee referred to as speed dating. In the chat rooms, participating "innovator" companies spent 10 minutes talking with smaller groups from the audience. Borrowing a move from The Bachelorette, attendees who thought they'd found "the one" slipped a poker chip into that company's box. The companies with the most chips were dubbed the winners. These turned out to be Quantum4d, which provides software designed to help users fight money laundering issues and The Entrepreneurial Finance Lab, which uses psychometric principles to test the creditworthiness of consumers with thinner credit files.
Like the startups, the innovators are invited to attend Sibos along with Innotribe's earlier regional winners from Asia and Europe. Unlike the startups, they aren't competing for $50,000. However, the cash prize is less the point, Peric tells BTN. The challenge is meant to help entrepreneurs network with the right contacts. "You can't walk the down the street and have meetings with [bank execs]," Peric says, adding there's motive for the bankers too. "The source of most innovation comes from startups."