As the interest in fintech has skyrocketed in recent years, one of the ways that banks have kept a handle on the disruption is by engaging with startups to bring new thinking into their old organizations.
Barclays have done this with their coveted accelerator program, which allows the bank to keep an eye on the hottest technology in the financial space, and allows the startups to gain valuable knowledge and experience from the bank.
With this approach, Barclays hope to have formed a window that allows them to see and engage with the future of fintech.
Helping Barclays into the digital age is Chief Design and Digital Officer, Derek White, who sits down with Hot Topics to give his views on how fintech is progressing, and how banks such as Barclays can utilize it most effectively.
HT: How can AI become integrated with fintech?
DW: AI is used today in some areas of fintech: in call centers, in algorithms for aligning best suited products for customers online, but the real advent is yet to come.
As greater consumer adoption of AI is used in other aspects of their lives and they become increasingly comfortable with avatars through a voice and through a visual, greater opportunities will arise for AI in the future of fintech.
Is it potentially the next step of human’s interaction with computers? We see it as a very interesting field in and an area that we’re looking at.
The very basic elements of how AI can help any organization is through account opening, through servicing your account, but then it gets very rich when you start to look at how you can make that interaction with your financial life more engaging.
Just looking at the traditional banking products, the traditional account opening processes and experiences that banks do today, can be assisted with voice-enabled interaction with computers.
The really exiting stuff is around extensions of your financial life: everything you do with your money, whether its investing, whether it’s buying, whether it’s researching, whether it’s sending money, extensions of that, and then into your hobbies.
Banks used to be the very center of growth for businesses and for individuals and that’s what we’re increasingly trying to do, get back into the center of their financial lives.
HT: The banks have obviously moved a lot slower than the startups during the current fintech boom – how much of this is down to the size of the banks being unwieldy, and how much of this is down to not being able to negotiate regulation quickly enough.
DW: Regulation definitely comes into play, but it isn’t by any means a barrier to innovation and creation. Many of the startups are operating within a regulated framework.
You see a lot more interaction happening within the payments and lending space because that’s less regulated than other aspects of the industry, but there’s innovations that’s happening in big organizations, creating the future of fintech, especially as those organizations are increasingly looking to create their future, not just change their future as they work like startups.
Taking ideas from someone’s head, because there’s a unicorn in someone’s head in an organization, and pulling that unicorn out and translating that idea into something beautiful for a customer, that’s what’s exciting.
That’s happening right now in large organizations, there’s an opportunity for that to get better, but we at Barclays have about 50 startups that we’re running that are working at that pace.
HT: What are the advantages of coming through an accelerator like the one at Barclays?
DW: I’ve heard there’s up to 900 co-working accelerator programs globally. What’s unique about the Barclays accelerator is that we actively share our strategy; our problems, our challenges and we invite startups to come in and solve those problems, co-creating with us.
There’s 3 main ways that we help out startups: firstly, by providing them access to data that is anonymized but helps them build their business.
Secondly we help them with design. We have an in-house design team of 250 people that are actively helping the startups refine their story, where they should be focusing, and human-centered design that’s the future of their business.
Finally, we also do architectural reviews to help them on their core technology, how are they best using technology, and is that technology that they’re building on saleable.
HT: Is there an area that Fintech hasn’t engaged with fully yet that it could grow into?
DW: We have a very different model for the future of fintech that we’re not sharing with the public yet, but sufficed to say it has to do with platforms, networks and marketplaces, not traditional banking.
It’s about recognizing that fintech is moving from closed systems to open systems, closed marketplaces to open marketplaces, closed innovation to open innovation.
Heritage players have got to recognize that they don’t have innovate everything themselves, heritage players can work with startups in active and open disruptive co-creation and that’s what’s really exiting, that’s where I see the future of fintech; the convergence of heritage players with disruptive startups in co-creation.
HT: Do you see the current fintech boom slowing down?
Not for the next 7 years or so. There’s a lot of hype and there’s a lot of capital being sloshed about, but that’s a lot of bets and some of those are going to pay off to be fundamental disrupters of the industry, fundamental changers, and the next unicorns.
Obviously we hope that we’re the creator of the next unicorn, and we welcome the startups and the disruption because it helps us up our game.
Derek White was interviewed after he spoke on the panel at the BIO Agency whitepaper launch.