Financial technology has been called a disruptive force for big banks, but the growth of startup accelerator programs shows how banks are trying to change that conversation.
Finlab, short for Financial Solutions Lab, is an 8-month startup accelerator program funded by JPMorgan Chase and run by the Center for Financial Services Innovation. It just sent out its third call for applications from financial technology startups working on tools for underserved populations. It’s an example of how banks are now partnering rather than competing with startups — a trend that’s grown quickly over the past couple of years.
“First and foremost, these big companies need to show that they can play nice with startups — that they’re investing directly or indirectly in startup efforts,” said Ryan Gilbert, partner at San Francisco-based Propel Venture Partners.
An accelerator program helps early-stage companies develop ideas beyond the concept phase. The goal of these programs is to develop outside talent or new products that would be hard for banks to do quickly on their own. Most major banks have their own programs, including Barclays, Wells Fargo and Citibank. Chase has a couple of them, including an “in-residence” program along with Finlab.
“The driving motive is where we as a firm can contribute our assets and our expert networks to help some of these early-stage financial technology innovators get to the next level,” said Colleen Briggs, executive director of community innovation at JPMorgan Chase. Banks also have the added advantage of working closely with nimble startups in technology, which opens up a new pool of talent to them in an industry in flux.
Finlab began two years ago, and winners get $250,000 of capital, one-on-one mentorship and networking opportunities. About eight or nine winners are picked each round. Winners participate in a series of workshops across the country on how to grow their businesses, including a session on regulation.
Participants say they’ve benefited from introductions to contacts in business, government and nonprofits.
“If you need a banking relationship, it can take upwards of 18 months to partner with them — they have to vet you and see if you’re worth the risk,” said Alex Marlantes, CEO of Everlance and a member of Finlab’s second graduating class. “What this program does is let you partner with them. They also help you get a seat at the table with regulators.”
One early success story was the bill-payment app Prism, part of the program’s first class. Within a year of joining Finlab, the company was acquired by PayNearMe — a milestone that was possible due to the mentorship that the program offered, said Tyler Griffin, who is currently entrepreneur-in-residence at the Center For Financial Services Innovation (and co-founder of Prism, which he has since left).
Big banks are likely to keep supporting these programs — not only for relationship building, but also because startups are working on areas major banks aren’t addressing, said Gilbert.
“We’ll see more and more companies saying, ‘Well we want to be part of this — it’s our way of learning about the startup ecosystem and showing that we’re good partners.’”
Why DTC brand Sugarwish is dialing down its social media advertising strategy
As social media advertising becomes increasingly expensive and harder to track, personalized gift company Sugarwish is rethinking its social strategy and reducing efforts there.
Gaming and esports influencers and executives dish on their most dreaded video game bosses
As shown by the success of Elden Ring this year, challenging, narrative-based titles are still the ideal for many core gamers. Digiday reached out to 15 prominent executives and influencers in the gaming and esports industry to ask about their most dreaded video game boss — and why.
In bid to become an always-on advertiser, Shell turns to dynamic creative tech
Shell has been testing a way to automate the creation of online ads. Do this well, went the thinking, and it gets a lot easier (and affordable) for Shell’s ads to run consistently throughout the year.
SponsoredHow brands are activating Gen Z and millennial TikTok audiences
Roland Hamilton, senior vice president of global licensing, Trusted Media Brands Although TikTok is widely considered a Gen Z platform, the video-sharing app also boasts a high number of millennial users. With more than 100 million active users in the U.S. alone, 32% of TikTok’s global audience is between the ages of 25–34. This large […]
‘Frozen slices of Americana’: Pabst Blue Ribbon goes experiential with branded motel rooms
With this experiential effort, PBR is looking to tap into what people think of when they think of the brand -- that it's "classic, traditional, Americana."
The demand for cookieless targeting is fueling ‘SPO 2.0’
Havas Media Group and PubMatic ink partnership, as buyers eye reduced ad tech taxes.