Accenture’s not talking about outsourcing so much these days, but can pitch a strong digital message, says CEO Pierre Nanterme which resonates across the Atlantic when Andy Murray, British tennis ace made headlines recently and this time it’s off the court by teaming up with Seedrs, an up-and-coming British crowdfunding platform through which small companies sell stakes in themselves.
Approximately 4000 fintech startups are active with a dozen of them being valued at over $1 billion .Most being tiny though they are growing fast. Lending Club, the biggest fintech lender, has arranged $9 billion of loans since launching in 2007 compared to $885 billion of credit-card debt in America alone. While fintech groups do business in the billions Banks deal in trillions. Few in Silicon Valley or Silicon Roundabout want to take on that heavily regulated bit of finance. Many admit they depend on the Bank. After all, you need a bank account to use most fintech services.
    1. Fintech target only the opportune areas in the Bank and the associated complicated process aligned to them without targeting something end to end.
    2. Fintech are not monoliths as there is a clear distinction between the fintech startups that have built systems they want to sell to banks or that require banks to work with them, such as Aire and GoCardless, and fintech startups set up to compete directly with the banks, such as Ratesetter and TransferWise.
    3. FinTech companies are extracting the most profitable portions of the banking model, leaving banks stuck with high overhead and less profitable products. Around half of all (retail) bank customers are unprofitable already as Banks follow a loss leader pricing strategy
Fintech companies have constraints apart from scale and size in terms of
    1. They are not well-staffed and suited to deal with consumers' financial services needs as they have desks to deal with technical-support issues & to displace banks, it will take a lot more than just “technical support."
    2. Banks also have a major edge over startups when it comes to cybersecurity. The implication is that since smaller tech firms cannot afford to make that kind of investment, they will remain beholden to banks.
Bankers and Silicon Valley types are fond of framing their rivalry over the future of financial services as ‘A winner-takes-all game’. That’s certainly is not what is the result of the ‘Bankers and Silicon Valley’ rivalry rather it’s a story of two sides surviving one another — and may even needing each other.
While the Banks will be left to deal with infrastructure and regulatory issues thereby allowing the Fintechs to free up money and resources to concentrate on developing new technology. The Fintechs don’t expect to get charters in US,UK, Canada, New Zealand, Australia or elsewhere and here is where the banks are needed but at the back end. “The banks and fintech firms are settling into a pattern of mutual dependence and the ‘Balance of Power’ getting reflected in Banks’ pouring investments into innovation labs and acquiring customer-friendly startups.

"Banks are recognizing now that the only way forward is with tech companies that own the customer experience," Brett King, the founder and chief executive of mobile money-management service Moven, said in a characteristically bold declaration. Besides for Banks’ it’s difficult to innovate fast when you are a brand as apart from reputational risk there are a range of rules an established financial institution must adhere to – everything from regulation to security. To recoup their resulting market losses and mitigate the threat of FinTech insurgents, traditional banks and other legacy players in the financial sector are discussing a range of strategies, including charging more for low-margin services, closing bank branches to cut costs, and the most substantial one- Acquiring, Partnering & Launching/Funding FinTech companies.
Last year Barclays launched their own fintech incubator and Santander set up a fund to invest in fintech companies, while this year Visa Europe has launched an accelerator called Collab.
Rhydian Lewis, CEO and founder of the peer-to-peer lender RateSetter believes that Banks don’t yet know how to incorporate innovations into normal business. For that reason, he says, fintech start-ups generally don’t have to worry about having their ideas copied or stolen by banks: “Good intentions are not enough, banks need to change their ability to take new innovation to market if they want to see a return on their investments in the fintech community.”
As customer expectations extend beyond categories, successful solutions must move beyond silos. The environment it operates in, the devices on which it works, the winning themes - they could all be redundant in a longer time-to-market. Enterprises must hence focus on quick execution of ideas, in stark contrast to how they have traditionally operated. Digital Transformation moves to a different beat as it is in a space where forces driving the ecosystem are in a state of constant flux.
Infosys , Indian outsourcing major has made two acquisitions – that of Panaya and Kallidus – but the total value of these acquisitions is less than $ 0.3 Billion. This doesn’t even match the incremental cash flow the company has got in just one financial year. According to Infosys, its liquid assets stood at $ 5.50 billion on March 31, 2015.Wipro has gone in the same lines and bought ‘Designit’ and sits on a cash pile of over $2 billion. Accenture has acquired ‘Chaotic Moon’, ’PacificLink’ and ‘Bright Step’ to consolidate its digital capability is a space of less than a month.Lazy cash in books of outsourcing majors might as well mean Banks & Fintech have choose to engage directly with the each other.
Accenture’s early investment in digital services capabilities continues to pay off with the firm reporting a 30% increase in digitally-derived revenues for its latest quarter ending March 2015.Is this the beginning of ‘outsourcing being a progressively a less talked word if not a ‘dirt’ word? With cash stock piles and a few Fintechs of approximately 4000 valued at over a Billion USD its shopping time for outsourcers.

Burning cash is another thing.

(The views expressed on this site are my own and not those of Capgemini)

(References ; Moneycontrol.com,The Nytimes,The Economist,The American Banker,The Guardian,BBC.Co.uk)