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Like a few other banks with similar initiatives, Wells Fargo is not counting on a financial return for its new accelerator program. Rather, it's looking for more intangible benefits.
August 20 -
Citigroup has issued a fintech challenge that asks developers to propose banking technologies that interact with the Internet of things and consumers' wearable devices.
September 25 -
First National Bank of Omaha is preparing to host its second hackathon to foster new ideas and relationships with coders who could end up working from the bank.
September 5
An Italian bank is going further than most financial institutions to foster fintech startups.
CheBanca!, based in Milan, kicked off a campaign to create a community for fintech enthusiasts earlier this year. Partnering with the blog Startup Italia and university incubator Polihub, the bank helped host a competition that doled out money and mentorship to fintech entrepreneurs.
Such bank-sponsored contests are familiar to observers of the U.S. and international fintech scenes. But CheBanca!, the retail banking arm of the Italian investment bank Mediobanca (and no, that exclamation mark is not a typo), is also working to give the young companies under its wing international exposure and determine which ones it could use as vendors internally. The strategy is founded on executives' belief that tech entrepreneurs will greatly shape the future of banking.
"I truly believe that most of the innovation in the financial services arena in the years to come will be generated by outsider fintech," said Roberto Ferrari, general manager at CheBanca!
CheBanca! is going the extra mile to sow and nurture fintech startups as banks worldwide increasingly recognize the need to transform their businesses to better meet digital demands.
To accomplish those goals, financial institutions worldwide are experimenting with running or sponsoring incubators, accelerators or hackathons. Wells Fargo, for example,
"The reality is the banks are very slow to move," said JP Nicols, co-founder of the Bank Innovators Council. "They have very long sales cycle."
CheBanca! itself is a startup of sorts, formed by its parent only six years ago. The retail bank has a small network of
It aims to find ways to be more open and innovative in a country with hundreds of financial institutions. Most recently, CheBanca! updated its mobile app so that its customers can use PayPal services from within the banking interface an upgrade that involved working with a young Italian tech company, among other partners.
Its app, called WoW, lets customers, and more interestingly, non-customers use PayPal's services in addition to other financial accounts they wish to integrate. The app can be used to pay bills, postal orders, and peer-to-peer payments.
Mercantile Bank in Michigan, USAA and Union bank are some of the U.S. banks that let consumers use PayPal from within their interfaces.
CheBanca!, meanwhile, wants to continue to integrate other mobile wallets into its app so consumers can pay the way they want on a smartphone, under the bank's brand.
"We want to be an open bank. To be open, we have to talk with startups," said Ferrari. "We want to be the point of reference for the fintech community."
This is also what drove the bank to allocate marketing budget for the competition that it now plans to convert into a campaign without a deadline.
"It started off as a small idea of a contest and now [we're] planning on making a whole project that will not end," said Paola Salvatori, head of retail and private banking communication at Mediobanca. "We will learn by doing."
Outsiders Wanted
Like other banks hosting similar events in other countries, CheBanca!'s contest called for coders to pitch it on financial services projects. In October, CheBanca! announced four winners out of about 70 applicants: modeFinance, which makes an app that evaluates private companies; Cryptodeer, a Bitcoin competitor; Wolf of Trading, a portal for traders and financial institutions; and Borsadelcredito.it, which helps companies find financing online.
The digital bank plans to partner some of its bankers with the event's winning startups in its office by the end of the year, to let them work together on ideas that could be integrated into CheBanca!.
modeFinance, which offers an app to evaluate the credit risk of private companies, views its participation in the challenge as a means to get access to a bank which is not usually easy in addition to help in landing venture capital backing.
Mattia Ciprian, chief executive officer of the company, which grew out of research at the University of Trieste, said he encountered the contest in his Facebook feed. Now, the startup and CheBanca! are in conversations about how modeFinance could potentially benefit the retail bank. The young company is also scouting for partners to help scale its business on the heels of its bragging rights.
"You have to find the right way to promote yourself," said Ciprian. "Winning a contest is the best way for finding new investors." CheBanca! is also working to expose startups like modeFinance around the world so they can have a better chance to secure venture capital funding, which is limited in Italy.
"They have the potential to be successful, not just in Italy but internationally," said Ferrari. Efforts include Facebook and LinkedIn community pages, an e-book project, and a potential mini-event in London.
Ferrari points to the WoW app as the most recent example of work results from the bank buddying up with an outsider and an attitude it plans to continue to embrace.
"This is the way we will build innovation in the future and will continue to disrupt the market from the inside," said Ferrari.
