Why Enterprises are Looking to Startups for FinTech Innovation
Startups in the FinTech industry are looking to disrupt the way financial systems operate, and in doing so, are altering the path of global enterprises looking to stay relevant in an ever-evolving world.
When credit cards were introduced to consumers in the 1950’s, it marked the start of the FinTech industry and the slow decline of paper money. “The day will come when the plastic card will make money obsolete” said Alfred Bloomingdale, heir to the Bloomingdale’s department store and the first Vice President of Diner’s Club, the first consumer credit card.
Just 65 years later, financial technology is what drives the world each and every day. From tellerless banks to the complex systems that control Wall Street, FinTech has become the most powerful industry that no one stops to think about.
More so than in any other industry, FinTech is dominated by young up-and-coming startups that are coming up with creative ways to challenge the system and alter the way in which financial services are conducted and received. Enterprises that formerly relied on institutional trading and traditional financial services are struggling to keep up with the times and meet the demands of consumers. Aside from hoping that decision makers run into the next big thing at a meetup or finding the right PoC on prooV, enterprises have few options available to them in terms of easily finding the next big thing in FinTech.
How Startups in FinTech Challenge Enterprises
The vast majority of the startup world is based on improving existing technology, however that is not the case in FinTech. Rather than focus on improving what is already out there, many startups are creating truly game changing innovations that are challenging the financial services market and the way enterprises operate.
In the past, large enterprises were able to uphold their market share and dominance thanks to the exclusivity of institutional banking that was reserved for high volume corporations. With the introduction of the retail market, and the increased accessibility of financial technology for the masses, many enterprises have lost their market share and must seek new solutions with startups they once dismissed.
The Bloombergs, Thomson Reuters and Misys’ of today are looking to startups for answers on what tomorrow will bring. The problem here lies in how truly disconnected enterprises are from modern technology.
While decision makers at enterprise level companies still hold on to the dream of finding the next big game-changing innovation at a meetup or Starbucks, the fact is that those encounters are few and far between. The truly revolutionary startups are focused more on their innovation and less on wasting time hoping for a chance encounter that will likely result in a dead end wall thanks to a petty gatekeeper.
FinTech startups today are turning to prooV to prove their product and connect with decision makers in leading enterprises. By turning to game changing technology, these startups are forcing enterprises to alter the way in which new technologies are sought, tested and created.
How FinTech Innovations Are Discovered, Tested and Scaled
Instead of relying on chance encounters and wasting time testing technologies that don’t suit their needs, Enterprises are looking to the pilot-as-a-service platform by prooV to explore new technologies and connect directly with the founders of these technologies.
Despite the fact that startups are introducing more and more game changing innovations to the FinTech world, the FinTech industry has remained exceptionally resistant to new innovations due to the complexity of enabling integration for testing purposes.
By connecting to the prooV marketplace and single sign on integration with their secure network, enterprises are able to access hundreds of innovative solutions in any industry and reduce the time wasted on examining their relevance. For enterprises, specifically those in the FinTech industry, this is a cost effective and efficient way to examine new technologies without the hassle of vetting each individual startup, enabling access to their ecosystem for testing purposes, measuring the efficiency of the pilot and looking to see how it can be scaled to mass markets.
Enterprises are able to express their specific needs and ensure that startups wanting to prove their concept do so in a way that suits the enterprise’s specific needs and demands.
How Enterprises Know What Innovation They Need
The journey a startup takes to scaling their solution with an enterprise involves granting the startup access to the enterprise ecosystem – a risky and worrisome task for enterprises operating in the financial world. Even if this risk is put aside, the problem in the FinTech world today is that many enterprises don’t even know what they are looking for.
The most revolutionary FinTech innovations in recent years have been true game changers and not just improvements on existing technology. Without direct access to the startups themselves, enterprises have little hope of finding these technologies before they become direct competitors themselves. Since startups by nature think outside the box and offer creative solutions for complex problems, many times they go so far as recognizing problems enterprises did not even realize they had.
The resulting lack of awareness and inability to open direct communication between the startups and enterprises is quickly changing with the availability of the pilot-as-a-service marketplace. The new prooV PoC solution offers a true win-win scenario for startups and enterprises.
With prooV, enterprises are able to access and explore new innovative solutions and instantly test them on prooV’s own ecosystem without risking breaches, and startups are able to easily integrate and test their technology and its relevance to an enterprise in minutes.
In a world where FinTech is not just improving existing financial services, but rather replacing it completely, enterprises that hope to stand the test of time must look now to startups for true innovation or risk being another case study for the MBA class of 2025.