By Matt Harris, a managing director at Bain Capital Ventures based in New York. He has served as a sponsor for the FinTech Innovation Lab since 2010.
As a founding sponsor of the FinTech Innovation Lab, I’m often asked why I so highly recommend it to entrepreneurs with whom I work and to others. There are plenty of reasons, but they add up to an unparalleled opportunity for the fintech companies selected for the twelve-week Lab program.
Most importantly, fintechs get the opportunity to establish a fundamental partnership with financial institutions in order to better penetrate and understand their complex businesses. While the industry has been making strides in recent years in terms of integrating innovators, the very nature of global, regulated financial services companies makes them hard to sort out from the outside. And a technology entrepreneur requires up-close and personal knowledge needed to go to market successfully. This is where the FinTech Innovation Lab enters as a beneficial gateway, run by the Partnership Fund for New York City and Accenture, with 45 sponsors and supporters from financial institutions and venture capital.
No other program rivals the Lab in its breadth and depth of industry support, from CEOs on down. The Lab offers first time and experienced entrepreneurs alike, as well as technology companies of even greater scale, a unique portal and guide to the heart of the financial services industry.
Solutions gain real-world focus from the start. In the selection process itself, sponsoring banks, broker-dealers, asset managers and insurers identify the priority problems they’re seeking to solve. Some of the issues are timeless, others are current pain points. For instance, analytics to make better sense of the business—whether it comes in the form of big data, AI, or machine learning—is an evergreen need from year to year. Security and fraud is, of course, unfortunately and predictably, an ever-growing one. Pressing, new areas include regtech solutions that address governance, compliance and regulatory challenges, as well as the whole field of virtual and augmented reality that helps consumers interact with greater efficiency and ease. But whatever the need, focused feedback on priorities direct from the source is priceless for the many financial technology companies who compete to participate in the Lab.
Evolution occurs through extensive mentoring of fintechs and unprecedented access to a broad range of financial services executives. This is one instance where it’s hardly stretching things to say that “magic happens” in the Lab. I’ve seen extraordinary transformations in the twelve-week program. By the time fintechs leave the Lab—tested by high-impact, iterative development and mentorship— they have a strong understanding of what customers’ true pain points are. They’re polished and thoughtful in terms of what they’re selling and how to best present their value proposition. Essentially, the Lab offers fintechs a rigorous but highly rewarding graduate program.
Acquiring customers can be the Lab’s most dramatic benefit. Many times, fintechs begin the program without them. And most times they leave the Lab with several proofs of concept and, often, a revenue-generating contract.
The final surprise for me is twofold. First, it’s enormously satisfying to see the degree to which the Lab has helped financial services companies gain access to innovation at a time when the industry is really benefiting from new ideas. Along with that, the Lab is also invigorating New York City’s sense of a mutually supportive, innovative community.
Looking back seven years to its start, the FinTech Innovation Lab emerged as a financial services industry plan to boost entrepreneurism, and at the same time stimulate tech and employment in New York. Today, we’ve helped fuel a sense of sharing among venture capitalists, entrepreneurs, financial institutions, law and accounting firms—collectively, a vital swath of the city’s economic fabric—who are banding together, excited to match New York’s growing strength in technology with its traditional leadership in financial services. For all these reasons, I continue to encourage fintechs to apply to the Lab. I regard it as a special environment to catalyze innovation and a great economic opportunity for all.