Any company, big or small, which wants to be successful, must constantly try to serve its customers in more innovative and efficient ways. For an increasing number of established multinational corporations – in industries ranging from food to sportswear, electronics to engineering – this means collaborating with, or taking inspiration from, smaller, leaner startups.
It’s an idea that’s been catching on for some time. A 2014 report from General Electric, itself a large corporation that has begun to apply startup principles to its own business, found that 85 percent of enterprises viewed startups and entrepreneurs “as by far the most desired partners.” And it seems the financial services industry has no shortage to choose from.
An article on BankInnovation.net notes there are about 12,000 FinTech startups worldwide, and that while some don’t want to work with banks, many are “actively looking” to partner with them. Indeed, as the Economist pointed out earlier this year, the Fintech landscape is growing rapidly, “attracting 12 billion US dollars in investment in 2014, up from 4 billion the year before.” Whether it’s how to better coordinate investment and advisory processes, how to be more transparent, or how to adopt new technologies, startups can help large financial institutions get to grips with some of the trickiest questions facing the industry today. In turn, banks can use their strength, size and scale to help move ideas forward.
Generally speaking, because startups are not bogged down by the processes and politics of large organizations, they are more nimble and better able to cater to customers’ emerging needs quickly and flexibly. From a bank’s point of view, startups can act as early indicators of new and upcoming trends, as well as serving as models for new, and potentially more productive, ways of working. According to Fortune, Mastercard is one example of a global financial services business that has tried to replicate a startup structure within its own organization, creating what’s described as a ‘mini-company’ inside its headquarters in New York to generate and test ideas. Other well-known global brands have set up, or teamed up with, ‘hubs’ at the heart of startup communities in order to build relationships with them.
Making an Impact
Credit Suisse’s partnership with Swiss Impact Hub Zurich is one of several initiatives the bank is involved with globally to promote innovation in the financial sector. The bank is a main partner of the hub, a new co-working space that offers a variety of different startups a place to work alongside each other as part of a dynamic community. Its founders say the aim is not to encourage competition, but to increase opportunities to share ideas in an atmosphere where people can learn from each other, whatever their business. There’s no reason a non-profit can’t learn useful lessons from a software developer, or a why someone working on sustainable energy innovations can’t inspire a fledgling fashion brand.
Credit Suisse agrees, which is why some of its employees are encouraged to work at the hub to develop, test and implement new technologies and solutions. It’s part of the bank’s wider strategy to connect with tech innovators around the globe.
“Our focus is mainly on projects where new business models and digital solutions can be found, investigated and tried out,” says Daniel Höfelmann, from Credit Suisse’s Digital Private Banking.
“We want to play a leading role in the digitalization of finance and establish Zurich on the FinTech map globally. It’s not only important for our Digital Private Banking initiative – it’s important to the entire business as a whole.”
Space and Freedom
Credit Suisse’s collaboration with the hub allows it to be a genuine member of the community – supporting and participating in the kind of events that, in Zurich’s case, could help raise its profile as a centre for FinTech innovation. In October, the bank sponsored and partnered with the first Fintech Startup Weekend Zurich, while just last month, it participated in Disrupt Finance, an event designed to connect entrepreneurial startups in the city with potential investors.
“For any business to be innovative and successful, people need the space and freedom to think creatively and implement new ideas,” says Daniel. “This is exactly the kind of environment the hub strives to create.”
“Technology is changing banking in ways the world could never previously have thought possible.” “We’re the bank for entrepreneurs, so it’s only natural we’d want to support, and be part of, this transformation.”