What banks want most from young fintechs

10.20.2021 - New York

American Banker

The largest U.S. banks are among the biggest buyers of technology in the world. Where the JPMorgan Chases and Bank of Americas are looking to buy solutions in a category, there’s a solid market for startups and incumbents.

Maria Gotsch, CEO of the Partnership Fund for New York City, and David Treat, senior managing director at Accenture, work with 44 large banks and insurance companies every year as they select and mentor a group of fintech startups in the Fintech Innovation Lab. Banks involved in the lab include Ally Financial, BofA, Capital One Financial, Citigroup, Goldman Sachs, JPMorgan, KeyCorp, Morgan Stanley, U.S. Bancorp, USAA and Wells Fargo. At all the banks, senior tech leaders spend protracted periods of time with the startup teams, often in the banks’ facilities.

Each year, before the next cohort of fintechs apply to join the 12-week accelerator (applications for the 2022 session became available Tuesday), Gotsch and Treat spend time with bank executives to determine the types of fintechs they would most like to see in the lab and ultimately, if all goes well, have their banks sign contracts with. This year, the bankers are said to be most interested in technology in these areas:

Blockchain/distributed ledger: A popular category this year is distributed-ledger technology, which is commonly referred to as “blockchain” even though most distributed ledgers wouldn’t meet a purist’s definition of blockchain. Such ledgers could be essential tools for handling all kinds of digital assets.

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