Supercharging the next fintech age through open innovation • TechCrunch
The next fintech era is coming. With the expansion of the financial services ecosystem beyond the traditional boundaries of banking, lending and investing, new industries and business models are being unlocked as demand grows for both embedded services and hyper-personalization.
Communities are turning to fintech to build services that meet their specific needs and use cases at the most convenient times and places, so it’s safe to say that many companies can benefit from building fintech into their services and strengthen customer engagement as a result .
But the world of financial services will continue to become more complex over the next decade. Businesses from across industries will quickly become overwhelmed if they try to do everything themselves while navigating new forms of payment, identity, assets, channels, segments and data. Companies that abstract away that complexity on behalf of their customers, partners and startup investments will gain long-term traction.
Traditional players, brands and emerging vendors alike are looking outside their own four walls for innovation to help them navigate this digital disruption, test new capabilities faster and at a lower cost, and validate the long-term value to their business.
This is where innovating how we work together can make a difference.
Design a model for the next generation
Simply using a traditional model is not an option. A completely new way of thinking is required – and it must be rooted in the belief that a company can innovate both for itself and for the rest of the financial ecosystem, and that co-mingling and co-creation can exponentially accelerate innovation.
There are a number of ways to deliver partnerships that will evolve over time into well-rounded, multi-faceted relationships. These range from incubator and accelerator programs to direct and limited partnership investments to new platform marketplaces and inorganic business building. The constant is that a strong technology partner should cover a wide range of core capabilities and innovations on your behalf – whether in transformational technology, adjacent industries or pre-assessing other fintech propositions – to enable laser focus on customer experience, rapid testing, and scaling.
That is why FIS, a leader in the fintech space, has created FIS Impact Ventures, its corporate venture arm designed to be the engine of future innovation, as well as a vehicle to nurture and grow start-ups.
The mission begins with identifying and understanding the disruptive trends that will define the future of finance and commerce, such as blockchain, Web3, data and AI, and digital identity. Driven by this insight, FIS Impact Ventures is designed around two core functions: A venture investment function that leverages strategic investments in start-ups, venture capital funds and venture studios as an inorganic accelerator for the business; and a fintech advocacy function with accountability for delivering tangible value quickly to each investment and unlocking critical FIS resources for each startup.
FIS Impact Ventures helps build startups from the ground up, advising business leaders from the problem identification stage all the way to launch and beyond. With each investment, FIS Impact Ventures commits to delivering on long-term commercial potential – not just acting as a passive investor.
Guiding startups to scale requires a range of strengths, which is why FIS Impact Ventures provides its partners with great benefits and good faith. This includes extensive, deep domain expertise, proven technology infrastructure and a global distribution network that allows them to race ahead of the fintech innovation curve.
This long-term relationship building and mutual accountability, along with the breadth of its capabilities, is what sets FIS Impact Ventures apart. The secret to their success is to focus on what is most critical for startups to develop and innovate, and then execute it quickly. In return, the startups hold FIS Impact Ventures accountable for achieving their goals.
A platform approach to innovation
Many early-stage fintechs have struggled to find a foothold as major software vendors and financial institutions complete multi-year modernization transformations. The costs, timelines and bureaucracy involved in providing fintech capabilities to traditional banking and payments customers are far from optimal. All the while, the financial services market continues to evolve rapidly, with new opportunities being conceived, developed and delivered.
Within this environment, FIS Impact Ventures was well positioned to make an investment in a platform that could bring FIS and other partner functions online faster – leading to the creation of the FIS Banking-as-a-Service Hub. An “as a Service” platform supports fast-growing fintechs and businesses that want a lower-risk, faster-to-market model to offer both new capabilities and, in some cases, traditional banking and payment capabilities as well.
FIS Impact Ventures has been running an accelerator program for over 7 years, as well as making direct investments in early-stage fintechs in a fintech portfolio of 80+ companies. By integrating to the BaaS Hub, partners now have accelerated access to FIS’s vast distribution network that can deliver its services across a wide range of industry participants, including banks, fintechs and small businesses, all on a single platform. Perhaps more importantly, the FIS BaaS Hub can provide a quick follow-up to offer a continuous stream of differentiating features.
The BaaS hub also makes it easier to combine propositions across industries and areas outside of their core financial services expertise, such as banking and insurance, trading services and lending. This allows any fintech or business to create differentiated, experiential propositions, embedded in any digital channel, and tailored to target customer segments.
Perform today, shape tomorrow
The next wave of fintech evolution will be the deployment of API-led banking technology, allowing companies in all sectors to integrate low-code or even no-code fintech solutions into their business models. Looking even further ahead to 2030, ground-breaking fintech solutions will contextualize banking services through AI, data and identity.
Fintech is already changing the pace of ESG initiatives such as green finance or tailored solutions for minority communities with the aim of improving financial inclusion. As a trusted partner for their customers, banks and businesses can bridge intentions, knowledge and action to drive sustainable finance and better results for their customers. With fintech partners, they will get there even faster.
The startup investments, platforms and collaboration led by FIS Impact Ventures will play a unique role in bringing future fintech ideas to market and opening bigger doors.
For more information on how fintech collaboration can help your business, visit FIS Impact Ventures.