The panel opened by exploring the concept of emerging technology, and given that a lot of fintechs rely heavily on new and developing technologies it was a pertinent starting point.
Nathalie Dore, Chief Digital and Acceleration Officer at BNP Paribas Cardif stated that for her, emerging technology consists mainly of "deep tech" which specifically impacts insurance businesses by decreasing risk for their customer base. Michael Roberts, Chief Marketing & Digital Strategy Officer at Bank of America Merchant Services, added that it can go beyond this and means technology which meets the emerging needs of the customer base itself. As the other panelists, Matt Ribbens, SVP Enterprise Digital Strategy at BB&T; Dave Mooney, President and CEO at Alliant Credit Union; and Travis Skelly, Senior Vice President, Venture Investing at Citi Ventures went on, their objectives became clear. Many of them focus on improving the client experience and anticipating new demands, effectively making the business more customer centric. Mooney summed it up, "it's less about the newest technologies, but about the application of them".
So with this revelation came the next question, "what types of technology and partnerships are being invested in and prioritized?"
Ribbens kicked it off by announcing his company's , BB&T's, commitment to investing $50 million in fintech, explaining this is a large part of their accelerated digital transformation program. Dore listed off some of BNP Paribas Cardif's key start-up investment areas, including blockchain, AI and IOT. She described the key to their investment strategy was always doing a project with the startup they invest in, "we don't just do the investment and then wait for financial return, we want a learning curve of the technology. For the startup, this is also an acceleration for them... It's a win-win situation."
Roberts explained their strategy was two fold; first getting back into channels they had previously been cut out of by competitive software companies, and second, embedding their own features and offerings through fintech.
Mooney added that their primary objective when it came to partnering with fintechs was learning, "specifically, how to work with fintechs... as the situations and motivations [between banks and start-ups] are very different, and reconciling those differences is important". He went on to say that while they had "modest expectations" for the financial gain, they did see the partnerships as having a direct financial benefit.
Skelly continued that, from Citi Ventures' perspective, they invest in early stage companies (and not just start-ups) with the goal of commercializing with Citi and their clients, and looking for the tangible results of cost savings and revenue generation. He then went on to explore an interesting idea that, through these same partnerships, fintech startups are coming to understand that there are reasons why banks can find it hard to partner up, from "not having security procedures up to snuff and not having regulations to abide by." He closed by stating that while indeed there are learnings for banks working with fintechs, there are also learnings for the startups to process when trying to partner with banks, too.
Moderator George Anderson, CEO & founder at Ninth Wave, finally posed the question: what is driving the investments for the organization and how do you make it a success?
Mooney said it was critical that organizations go into partnerships knowing what they are looking to accomplish, and that this can vary a lot - from direct financial gain, access to new markets and reducing expenses through efficiency gains. Once a bank know what it's looking for this should drive the investment.
For Dore, they ensure they run "innovation pilots" with clear KPIs which they share with the startup. Ribbens agreed, and added that the key was in proofs of concepts, "you don't want to take a risk on an idea you don't know you can get to the finish line with."
Travis concluded the panel with, "in areas where the business is strong, I've seen great appetite from the leaders to experiment with innovation and start-ups to maintain that position... On the other hand, I've seen where we're not as strong a similar mindset because "why not?"... It's the two ends where I think you'll see more experimentation now and in the future."
Watch the full panel