Is the secret to startup success collaboration rather than disruption?
That question was becoming increasingly relevant as banks began to support startups and experiment with innovation inside their own ecosystems. FinTech 1.0 had forced banks to take notice. FinTech 2.0 was beginning to ask what happened when banks became participants.
Collaboration is rebooting financial services
The “FinTech 2.0” idea was built around a simple observation: startups had often moved faster because they could take advantage of digital technology without carrying the legacy systems and processes of large financial institutions.
For banks, working with those startups offered a way to access products and capabilities that could be more user-friendly, cost-effective and suited to digital channels.
Collaboration with banks and other financial institutions therefore looked like a near-term part of the FinTech model, rather than a contradiction of it.
Do startups need to refocus?
One of the more interesting arguments in the FinTech 2.0 discussion was that too many startups were concentrating on building standalone “unicorns” rather than addressing the much larger opportunity to re-engineer financial-services infrastructure and processes.
That distinction matters. The largest opportunity may not always be replacing a bank outright. It may be changing how the system underneath the customer experience works.
For banks, this creates a paradox. FinTech increases competition while simultaneously giving incumbents access to tools that can help them reduce costs and respond to changing customer expectations.
The question I was interested in was therefore becoming less about whether FinTech would disrupt banking and more about where collaboration would leave the balance of power.