Despite growing cooperation between financial institutions and fintech startups, collaboration remains challenging and time consuming, according to a survey of players from both sides.
Having come together to create the Fintech Innovation Lab back in 2010, Accenture and the Partnership Fund for New York City have now produced a report trying to gauge how the participating startups and FIs feel about going through the technology onboarding process.
The report finds differing perceptions among the 52 lab alumni and 35 FI sponsors (from London, New York and Hong Kong) of what was occuring during four key partnership phases - prospecting, proof-of-concept, procurement and implementation.
Says the report: "Overall, onboarding technology products at financial companies appears complex and under-resourced from the fintech perspective. And while financial institutions are moving to streamline internal processes, fintechs suggest they aren’t as far along as they think they are.
"But fintechs also may not be as sophisticated as other large contractors that are accustomed to working with financial institutions, which means it is sometimes difficult for fintechs to move through the implementation process smoothly."
When it comes to moving from prospecting to PoC, 60% of New York FIs cite regulatory, compliance or security issues as a major stumbling block. Yet less than a fifth of fintechs see a problem in those areas, tending to see lack of budget or competition with internal rivals as a bigger issue.
Reasons also diverge on why products stall in the proof of concept phase. New York financial institutions emphasise compliance and security issues as the top cause. Fintechs stress lack of dedicated employees or funding resources, and lack of alignment between use cases and product roadmaps.
The groups agree procurement takes too long, with more than 60% saying that the process lasts four to six months. And when it comes to implementation, more than half of respondents agree that security and compliance, and vendor approval processes slow efforts down.
The report recommends partners create a map to chart the process, designating a leader for each phase. Decision making should be streamlined and simplified, while sandboxes should be used to facilitate PoCs. But the report's clearest finding is the importance of clear communication.
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