By Maria Gotsch, Co-Founder, President & CEO of the Partnership Fund for New York City
If you’re an entrepreneur interested in a unique mentoring experience that will speed the development process of your business and heighten the odds the technology will work as a real-world solution, the Fintech Innovation Lab is the ideal accelerator program for you. The Lab helps fintechs and other tech companies with B2B solutions refine and test their value propositions by facilitating an open exchange of ideas among entrepreneurs and many of the world’s leading financial institutions who serve as mentors and sponsors.
Essentially, we build a bridge for entrepreneurs to understand where the priorities lie in a complex financial enterprise, what solutions are most likely to gain traction fast as well as the problems financial institutions actually face.
The FinTech Innovation Lab has performed this role many times and in different ways since 2010, partnering with 35 of New York’s leading financial services companies and 47 fintech alumni. Below are the three most common ways that the FinTech Innovation Lab helps fintechs accepted into the program.
Going from Technology to Product
An artificial intelligence company came into the Lab with cutting-edge machine learning technology that captured the interest of sponsors. What the fintech lacked was a clear value proposition, known integration path, adequate global support structure and the ability to pass compliance and security reviews—real-world demands that separate seductive toys from powerful, pragmatic applications. The Lab helped to bridge those gaps, and today the tool is automating the reading of unstructured data and financial documents in various languages, pulling it into a common form and finding anomalies for financial services companies.
Identifying Best Near Term Use Case
Other fintechs come into the Lab with a product proven in another industry and a host of ideas on how it might be used at a financial institution. The problem is understanding where your technology can solve the most pressing problems in a vertical that might be new to the entrepreneur. A cybersecurity company, for example, entered the program with operational systems that were proven in defense and security to hide sensitive, proprietary internet traffic from attack—a clear need in the financial services industry. But where exactly would the technology fit into a complex, global bank or insurer? Who in the organization would have the budget? Where might a small test deployment pave the way toward a wider rollout? The Lab served as a mutually beneficial platform for the fintech and its sponsor to answer these questions, and develop a tool that’s advancing network security, safeguarding sensitive financial data and, along the way, advancing the fortunes of a growing fintech.
Addressing Pressing Needs
Perhaps the most unexpected cases apply an interesting product to one that solves a more pressing need. This involves sponsors recognizing the potential power of an underlying technology, and working with the fintech to transform it into a solution for one of their own issues that also has industry-wide value. A data analytics company that participated in the Lab offers a good example. The fintech had a tool that blended many forms of public data (fax, microfiche, building permits, trade documents and more) into a comprehensive, searchable form. As part of the Lab, one of our partner financial institutions helped that fintech reimagine the product as a tool to help organize and more effectively leverage its own diverse, internal data sets, and then combine their data with external information to enable more comprehensive analysis. The result? The sponsoring financial institution improved the ability to screen its own customer base and better meet federal due diligence requirements.
The application process to select the next class of entrepreneurs will start October 19. The Lab’s financial services sponsors will assess the written applications and a subset of tech companies will be invited to make an oral pitch. Fintechs that capture the interest of the world’s leading financial and insurance companies will be chosen for the Lab.
Then, starting in April, the three-month program pairs winners with senior executives at each company. Fintechs meet the relevant people, test their ideas widely, and quickly learn the niches, limits, needs and spending priorities that close the gap between a promising idea and a funded project. The Lab serves as a “graduate school” among accelerator programs, with the world’s leading financial institutions mentoring fintechs for success.