At first, saying so might feel a bit surprising, random even. Sure, there are some great success stories like Prezi, Ustream, LogMeIn coming from there, but calling the area the next big fintech market – maybe a bit too much. Except when you dig deeper you can see that it has many similarities with the current fintech leaders; in e.g. consumer mentality and environment, regulations Read more »
This is a guest post from one of our mentors, Petri Ekman. Petri is an experienced executive with a broad and in-depth experience in financing, financial and insurance products and risk management strategies for corporate clients.
Change Started Later than in Many Other Industries
During my 12 years in insurance, I used to hear numerous times the claims “there have not been any new products in this industry for 100 years” or “this is how we have conducted our business for 120 years, and so far things have been rolling rather nicely.” These arrogant-sounding statements were used to blunt ideas to get some change in, well, most anything.
In reality, a major shift had already taken place then. Many companies had started to drive down their expense ratios to improve the profitability of their insurance operation. Read more »
It’s time for more deals and more pilots! Taviq from our second Nordea accelerator has just signed a pilot agreement with Nordea Private Banking, going live now. And that’s awesome news for Taviq and Nordea, but even better for Nordea’s customers!
In Private Banking and wealth management, too many clients drop off during the first meeting. That’s because the first meeting is like a cold blind date. Except the customer and the wealth advisor know even less about each other. The first meeting is spent figuring each other out; if the wealth advisor even is the right one to handle their money. Read more »
It has been a hard to keep our lips zipped with all these exciting news, but now we can finally give the first peek into the Global Fintech Accelerator – the first ever fintech accelerator done on such a global stage! We couldn’t be more excited to introduce new bank partners in the program.
Fintech experts have been calling China the hottest place for fintech for a while now, but now they are turning their attention towards India. And not without a reason!
India is a huge market. Just the sheer size of the country itself is humongous with 1,3 billion people and counting. And while the size of the country and its market are impressive, their fintech adoption rate is even more so. It is the top of the world with 52%, only second to China and far ahead of Europe (source). The market has very different conditions than the traditional western countries and they lack many of the legacy systems and old innovation-stifling regulations many banks and countries in the West have. No wonder India is hotter than hot in fintech!
That’s why for an accelerator focused in fintech, partnering with one of the strongest players in Indian banking scene Yes Bank could not be better news!
Yes Bank is the fifth biggest bank in the enormous market of India, they are highly awarded and even have a massive following in their social media channels (They are for example, the most followed bank in the world in Twitter). If India is hot in fintech, Yes Bank is even hotter! We can’t think of a better partner for startups than the Yes Bank Accelerator to take over the Indian market.
Our next partner comes from an equally interesting marketplace: Eastern Europe. China has had the fintech innovation crown for a bit now and India seems to be taking over. But is Eastern Europe the next hotter than hot market for fintech?
Eastern Europe has been able to fly under a radar for a while. But that won’t be so for long, especially when banking and fintech are in question. GDP of East European countries is growing nicely, in fact, better than nicely when compared to other European countries who drag behind. They also have a very interesting opportunity in the banking sector. What China and India have been able to pull off in fintech doesn’t seem too much of a fairytale for East Europe either. They do after all have many similarities in the consumer environment, regulations and other key issues that made China and India succeed.
East European consumers are becoming increasingly aware of the possibilities fintech innovations bring, and they will not just passively wait for them. They will demand them and they will demand them from their banks. Consumers still prefer banks over startups to provide their banking solutions, including new innovations. The local startup ecosystems are still just evolving, and there aren’t even that many real competitors for banks to provide such solutions. There is demand for fintech innovations but not much local supply. Game-changing innovations are expected to come from international players.
Overall, there is great potential for fintech startups in Eastern Europe to fill up the gaps in banking and disrupt the existing systems. But due to the strong status of the existing banks, not just any startup can do it. The fintechs need a way in. And that’s why we could not be more proud to partner up with OTP Bank, one of the biggest players in Eastern Europe.
OTP Bank has a presence in 9 East European countries (including dominating position in Hungary). And they are called the leading innovator in their market (more about it here). All in all, for startups there could not be a better partner to work with to conquer Eastern Europe.
At the heart of the Global Fintech Accelerator is, of course, banks working with startups, but also with other banks. The best results are when different kinds of banks with different experiences and knowledge work together. And we are proud to say that is exactly what is happening in Global Fintech Accelerator.
When you think about fintech you can’t help but also think about the Nordics. The Nordics have a flourishing startup environment that is attracting a high proportion of investments in Europe. Stockholm is the second largest fintech hub in Europe, and the whole Nordic fintech market is rapidly growing. The Nordics are also home for ginormous success stories like Klarna and iZettle, which have brought the area high to fintech investors interests.
A big part of the fintech’s success in the Nordics is its markets uniqueness. The Nordic countries are forerunners in many areas of banking. And that has made adopting new fintech innovations much easier for both the companies and the general public.
For example, consumers in the Nordics are avid smartphone users. In fact, smartphone ownership is almost universal, more than 9 out of 10 internet users have one. Nordic countries are also often referred to as cashless societies. Cash is not seen convenient and you can easily live your life without using cash pretty much 100% of the time. The Nordics also have strong electronic banking systems in place, and they have warmly welcomed innovations like e-invoicing. For example, 89% of large and even 59% of small businesses in Finland use it, and the usage is growing fast.
These and many other similar market conditions have made Nordics a very favorable for fintech innovations. Thus the Nordics just had to be a part of our Global Fintech Accelerator.
And we are very happy to have such a close relationship with Nordea, the largest bank in the Nordics.
Nordea has over 10 million personal customers and over half million corporate customers. They are also one of the top 10 largest universal banks in Europe, and have a presence in 16 countries around the world. They are also one of the very few European banks to have an AA- rating. We can’t think of a better bank to work with in the Nordics. Especially as they are already well immersed in the startup world.
We have already done three great accelerators with Nordea and we have had an amazing time working with them. Thus we couldn’t be happier to continue working with them!
These banks from such different areas and market situations will be giving amazing opportunities and insights for both the participating startups and banks. We are expecting to see great innovations, big changes and most importantly: more satisfied banking customers. Stay tuned for amazing results!
If your bank wants to get access to those results, there is still time! We have several models from marketing partnership to full accelerator in the Global Fintech Accelerator. Just contact Antti at [email protected], and let’s find together the best solution for your bank!
What will the future of banking look like? Just what the innovators will make it be.
Advances in technology, regulatory changes, new entrants to the market… In the past couple of years, banking has gone through big changes and more is to come. They keep saying the ‘future has never been as uncertain as now’ year after year, decade after decade. But in banking, this time it might be true. A lot of things are changing and a lot of things will change. And with it, a lot of challenges are coming. But more importantly: also opportunities. So, what should innovators focus to get the most of it all?
Technology is driving the change
When you talk about the future of banking you just can’t not talk about advances in technology. They are making things possible we couldn’t even imagine just couple years ago. No, even months if not just weeks ago. In fact, behind the success of many fintech startups has been mastering new technologies like AI, big data or blockchain and thus being able to create something completely new and revolutionary for the customers. And that has been one of the key reasons the little and new entrants have been able to challenge the old giants, banks.
For innovators embracing the technological changes and even new technologies is a must. Advances in technology and innovation go hand in hand. Like blockchain and bitcoin. And the first innovation is just the beginning. Just think about the innovations that have come and especially the innovations that are coming because of the blockchain.
While it is impossible to be the master of every single technology, innovators have to keep their eyes open. See what’s out there, what’s up-and-coming. And then use the opportunities that become possible. The players that refuse to adopt the new and/or evolving technologies are the ones who will lose. Just like many banks have noticed.
The future is mobile
It hasn’t been long when computers were huge, the size of rooms. Now they fit in a pocket and can do so much more. So so much more, especially with things related to banking.
Usage of mobiles is growing fast. Incredibly fast. And it is no wonder considering how handy they are, far from just calling and texting. Now we can handle our money usage, savings, investments, pay our bills, transfer money to our friends in an instant, pay for a haircut, do our accounting… and those are just some examples from digital banking. That’s a huge jump from storing our cash under a mattress or going to our banks’ physical location to let the employees do something magical behind the desk. Now the customers have control over everything. We can choose exactly the services we want and exactly how we want to use them, and when we want to use them.
And it is not just about making mobile versions of old services. Smartphones have made completely new things possible. For example, the spread of phones has been the key to fintech’s success in China and India. People who didn’t even have access to any banking services now have a phone, with what they now have access to exactly the kind of banking services they need. Mobile is completely changing the game. And innovators need to remember that.
Customer behavior is changing and millennials are ruling
The most hated, loved, talked about generation now is millennials, at least if you read any online news sites. And innovators should take notice.
Millennials are not only the cat video and selfie-loving generation: for example in America millennials will make more than 1 out of 3 adults by 2020 and 75% of the workforce by 2025. And America is not a unicorn. In just few years millennials will be the ones with the biggest consumption power and the ones making making decisions in corporations. If innovators ever want people and companies to buy their solutions, they need to know how millennials work. How they consume, how they make decisions, and especially, how they are different from the previous consumer majorities.
For example, millennials don’t share the previous generations’ love for owning things like houses and cars. They like to share them. And when they do want to own them, it’s usually later than the previous generations wanted. Millenials are diginative and put huge emphasis on companies’ presence online, especially in social media. And unlike the previous generations, millennials are obsessed with corporate social responsibility. In fact, 75% said that it’s either fairly or very important that a company gives back to society instead of just making a profit. In short, they are critically different from the previous generations.
Millennials and their quirks should be in the minds of innovators when planning, when creating, and when selling – throughout the whole journey of innovation.
Collaboration is a must – know how to do it
In banking the past years have been dominated by fierce competition between banks and fintech startups – the old rulers and the new challengers. But now the fierce competition has had to give space for fierce collaboration. Banks and startups have realized joining forces makes a lot of sense. Collaboration is now a must – for all innovators.
But just the willingness to collaborate isn’t enough. Innovators on both sides also need to know how to collaborate. Startups and corporations are after like two completely different creatures – the differences in their pros and cons and how they are complementary are, after all, why collaboration between the two makes sense. But that also poses many challenges to collaborating.
There are countless articles about how banks need to collaborate with startups and especially how they need to change to be able to do that. To not to smother the startups with their processes. But likewise, the startups need to know how to collaborate with the corporation. Many deals have been lost for stupid reasons, in essence, not understanding the other party.
For example, where is the user data stored is a question many bank and startups approach differently. The answer from some startups is ”Not sure, somewhere. Probably in some kind of a cloud. My co-founder might know…”. But for banks where and how data is stored and protected is one of the big things that keep them awake at night.
These are some of the big themes visible in banking now that innovators need to keep in mind. That is why they are also themes in the Yes Fintech accelerator by our Global Fintech Accelerator partner YES BANK. Take a more detailed look here, and see what kind of innovations banks are really looking for. And if you already happen to have an innovation that matches those themes, apply to the accelerator.
YES BANK is one of the strongest players in one of the hottest fintech markets; India, and the Yes Fintech accelerator also shows that. The perks will make the participating startups giddy (straight access to the huge customer base and YES BANK’s extensive market knowledge, huge number of APIs, investment opportunities, global fintech market access, coaching…. just to name few), as were the results from the last accelerator (e.g. 9/10 solutions from the accelerator were taken up by YES BANK. 90%! Not many bank accelerators can say the same!).
YES BANK has adopted a new approach to Banking, called A.R.T – Alliances, Relationships & Technology (A.R.T) approach to Digitized Banking. They are a good example of a major player in banking who has really taken on the collaboration part as they have already partnered with over 100+ fintechs to deliver best services to their customers. And thus the selected startups in Yes Fintech accelerator will be in good, no: great hands! Read more about the accelerator benefits for startups here.
Finding opportunities instead of threats
What differentiates innovators from the others is that innovators see opportunities where others see threats. Instead of shivering in fear and hiding under their blankets when someone mentions new technologies, changes in regulations or any of the usual commonly mentioned boogie men, they start looking for the opportunities in them. What could we do with this new technology? How could this new regulation be used to create new and serve our customers better?
The future of banking is made by the innovators. The startups, the banks and the ones who take on the opportunities instead of hiding from the threats. And that’s why innovators will also be the winners of the future.
Read more about the YES FINTECH accelerator here and apply now! Deadline the 14th of October 2017!
Collaboration. Collaboration. And collaboration. Be it global warming, science, the economy, collaboration is the word that keeps popping up more and more, especially during the past couple of years. With globalization, we have become so connected that collaboration is pretty much part of our DNA. And the need for collaboration is only increasing. And so are the possibilities.
Companies don’t just see other companies as competitors or suppliers/customers anymore. They are sizing them up to see if they should work together instead of trying to beat each other. That’s even more so in fintech.
Over the past couple of years, the narrative in fintech has changed from fierce competition and trying to one-up everyone else to collaboration. It’s no longer the established players, banks, trying to smother the new entrants, startups, or the startups trying to throw the old masters out the game. Now it’s about the two working together to create something neither could do alone.
Why corporations should work with startups
For corporations, working with startups can give them access to whole new kind of innovation power. While corporations have resources, a huge amount of industry knowledge and plenty of smart people working for them, they are rarely called innovation powerhouses – words often associated with startups.
There are many reasons why corporations can’t be as agile and innovative as startups are. While corporations can learn from startups (and they should!), getting new innovations from startups makes a lot of sense. That way they can get innovations from many startups. And they can get it much faster than by doing it by themselves. Quantity and quality without using much of their own resources.
Collaborating makes sense especially in areas that the corporation doesn’t have knowledge of in-house, for example in AI. Instead of spending resources of acquiring the needed knowledge and then starting to think what could be done with it, they can access the best AI innovations straight from startups.
By working with startups corporation are also bound to learn from them. They will get exposed to the ways startups work, and why they can be so agile and innovative. And those learnings can lead to organization wide changes.
Also, when corporations work with startups it is inevitable that some of the ’startup coolness’ will rub on on them. That’s good for customers, attracting new talents and getting new innovative startups to approach the corporation. It’s a win, win, and win!
Why startups should work with corporations
One of the big differences between startups and corporations is that corporations have a known name, brand value, behind them. They are a known and trusted player in the market while startups are nobodies. No one knows what they do, what they can do, or even if the whole thing is just a scam. Especially in banking gaining the customers’ trust is a very important but difficult issue. After working with a big name in their industry, like a known bank in fintech, startups are immediately on a different level. If that well-trusted corporation trusts them, also the customers think they must be legit and be able to execute what they promise.
Fintech startups also face the problem that they need data, lots of it to be able to make their solution work in real life. And they need users, people to test their solution. And the more the merrier. In such trust-sensitive industry as banking, getting those is far from easy, impossible even.
For lots of startups working in just one market is a luxury they can’t afford. Unless they are in a very market-specific business or work in a huge market like China or the US, aiming to be global is a must. But going global isn’t always (if ever!) so easy. In a new market, everything is different. The competitive environment, laws and regulations, even the customers’ needs among many many other things. There might be amazingly potential new markets, but if there is no entry point, they are often just passed to the ’no’-pile. But with a local partner, preferably with one that already has a great presence in the market, they can get just the knowledge and access to the market they need.
India & YES BANK
For fintech startups right now India is a very interesting market. And by interesting, I mean hot; hotter than hot even! In India there is a huge need for new fintech solutions. And even more importantly: people are eager to use them. In fact, the fintech adoption rate is on top of the world with 52%, only second to China and growing. The environment in India for fintech startups is also very supportive: investments are booming and the government is being very proactive in supporting fintechs. In short, India is THE place to be for fintechs. But accessing that massive potential is another thing. Foreign startups need an entry point, a partner to help them gain access to the market, the right knowledge and the tools needed. One good example of such is the YES Fintech accelerator by our Global Fintech Accelerator partner YES BANK.
YES BANK is the fifth biggest private sector bank in India – you can say they know the Indian market. And in the YES BANK accelerator startups get access to that knowledge. Startups also get access to their 200+ APIs and their 2 million + retail and 15 000+ corporate customers – just what it is needed to test and validate the startups’ solution.
In their first cohort as well, YES Fintech had two international startups – soCash (Singapore) and Paykey (Israel). The overall cohort ended up with an offtake of 90% wherein 9 out of 10 solutions were taken up by YES BANK.
The accelerator program also provides access to the top 20 global fintech markets, offer mentoring and coaching and much more. Just the knowledge and tools needed to conquer the Indian fintech market and in general, get the startups on a whole new level. You can read more about the accelerator here.
The real winners = customers
While corporations and startups will benefit greatly from collaboration, the real winners will be the customers. No matter what happens and who ’wins’ or ’loses’, customers will get more options and better solutions. And as there are plenty of options, in fact, more and more of them as the world is moving increasingly towards supporting competition (e.g. PSD2 in Europe), the customers can just pick and choose. The winners of the future will be the providers who answer the needs of the customers the best. Needless to say, it has never been a better time to be a banking customer!