Banking Innovation: Is There a Future In Coopetition With Fintech?

By Madhvi Mavadiya | 6 April 2016

Will banks remain finance leaders? Do traditional lenders perceive fintech to be a fad? Should banks and fintech startups work together and create an ecosystem where coopetition is where the future lies? Speakers at the second day at Money2020 in Copenhagen attempted to answer these questions.

Read our Payments R(E)volution magazine with more content from Money2020 Europe here.

Money2020 gives us a unique opportunity to get a first-hand impression of how the digital future will evolve in the financial sector and a chance to show the wider world that Copenhagen is a digital hub also capable of hosting the biggest international conferences,” according to Kent Petersen, President of the Financial Services Union Denmark.

As Petersen explored here, cities need to have the capability to adapt in order to keep up with the trends and regional financial institutions need to implement new tech where the customer needs it. Chief Innovation Officer of Rabobank, René Steenvoorden, strongly believes that time must be spent on innovation, but questioned whether you should talk about banks or fintech will win in this race. Working together is a mutual benefit.

There is no golden approach and every bank should find its own approach. It might take around three to five years to work out who is the winner, and we may not even have the answer then,” Steenvoorden said. The conversation then led to how agility is key for banks and finding your way and changing fast is the best for your business.
 
As well as this, Steenvoorden advised other banks to find their own stance and figure out what works for them while also following individual strategies. “Banks should pursue all options as there is no big solution,” but changing a lot at once will scare customers away as people do not like change in how they bank.
 
There is an innovator in all of us and there is no age limitation,” Steenvoorden said as he spoke about Rabobank’s own internal accelerator program. He said that collaborating together with fintech startups works well, as they know about disruption and they can also learn from banks because of their increased experience.
 
The banks on the other hand “have customers, people and money - and we can invest and we are not leaving,” Steenvoorden said. In conversation with bobsguide, Rabobank’s Head of Innovation Harrie Vollaard backed up this perspective by referring to innovation as an instrument and as “a lot of the innovation is coming from outside the banking space, it would be stupid not to embrace it into regular operations.”

Santander’s Victor Matarranz highlighted in a session around the future of banking that technology has been changing in banks for many years. “We are now in an intense period of change and it is important to spend time investing in the right thing, which is what customers want.” With all this change, as Karina McTeague from the UK Financial Conduct Authority explained, we need to be supportive of this innovation in a regulated manner.

We are seeing social, economic and global change, but the bigger risk is if we don’t embrace innovation in a structured controlled way,” McTeague said.

Read our Payments R(E)volution magazine with more content from Money2020 Europe here.

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