LFP040 – The 7 Strategies of Banks in Response to the Fintech Revolution with Anna Irrera Financial News

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In episode 40 it’s a good time to turn to the response of the banking sector (used here as a proxy for all FS incumbents) to the Fintech revolution – both Fintech’s #newFS and its #newTech/#newIT side.

anna irreracropI couldn’t think of anyone better to discuss this with than Anna Irrera who is perhaps the only full-time journalist working on Fintech in London. She spearheads the Fintech section of what is now the Financial News but was decades back when I recall getting the first edition the London Financial News, now owned by the Dow Jones Group.

FN also has a quarterly fintech-focused publication Fintech News, Specific areas of focus within fintech include: alternative finance, blockchain, big data, robot advisory, cyber security, trading platforms and digital payments systems.

Anna is well known in London FS on both the Fintech and #oldFS sides of the current divide and always talks from the perspective of speaking to the miners at the coalface rather than the warmth of the press office.

Topics we discuss include:

– Anna’s journey across many countries and from writing a book about Brazilian street children to writing about Fintech

– London as still a centre for folks to come to from around the world and the fusion/melting pot benefits that flow from the incoming people and ideas

– Life as a newbie journalist to getting a regular beat which then turned into A Big Thing

– FN Fintech coverage as a dedicated area began in 2014 and has expanded in 2015

– There are seven main strategies:

0) Do Nothing. Going out of fashion but still prevalent 😉 #Fintech as having grown-up from early days of “destroying the banks” to a more mature attitude; at the same time #oldFS as having gone from knowing and caring little to having to have a strategy in re and conversations at the Board level

1) Funds. Origins in principal strategic investment teams. VCs view of such. The large size of the funds when added up and the mystery of where all that money can be going (if its “real money” rather than PR or potential budget)

2) Innovation Departments. Pros and cons. General view that “when a large company sets up an Innovation Dept it’s time to sell its shares”. “joined-up government” ideas in this light (ie tying together a myriad of otherwise un-co-ordinated initiatives)

3) Accelerators. Individual banks accelerators, combined banks accelerators, and independent accelerators.

4) Compete. Another way of viewing Fintech is simply the impact of “digital” – ie the internet/web – on the FS industry. In this light the question is more “which organisations absorb digital best”; having said this the gigantic conglomerate nature of many banks impedes them making a nimble response.- The War for Talent – the importance to banks of hiring hot tech folks in a competitive marketplace when they might appear far less sexy than Tech business or Fintech business

5) Collaborate. A “cousin” of the Accelerator strategy and one type of collaborate is “Fintech competitions“. The challenge of the huge filtering process required when a bank wants to work with the #newIT end of Fintech.

6) Acquire – early days but see for example BlackRock’s acquisition of a “roboadviser”.

– The idea that it’s less “choosing the right strategy” – especially as many banks use several – and more about how well it’s implemented.

– Financial News strategy about how to cover the Fintech revolution

– Journalism’s challenge about how to cover new FS movements. The example of Brian Basham (now Chairman of Archover) in the ’70s starting the coverage of Unit Trusts.

And much much more 🙂