Devised by BNP Paribas Real Estate employees Lionel Bodénès and Alexandre Marcadier, ColivMe...
What is a fintech?
A fintech (for financial technology) is a start-up harnessing new technologies to reinvent financial and banking services. This term sometimes includes insurtech, with start-ups covering the insurance sector.
So, fintechs do far more than just develop software or dedicated applications for the financial world: they provide disruptive solutions, technologies and practices, changing the value chain through technological innovations. Fintechs offer a wide range of benefits and innovations: better customer experience and mobile banking applications, new forms of financing through crowdfunding, platforms, virtual currencies, electronic payment, online prize draws, etc.
With the acceleration of innovation driven by the digital revolution that is underway, there are growing numbers of fintechs, in increasingly diverse areas, from improving cash management to creating chatbots and securing transactions.
Fintechs in figures
The fintech sector is developing rapidly. It now includes nearly 2,000 companies in Europe, with nearly 750 in France. According to KPMG, this sector is seeing investment levels continue to rise, reaching a high of 112 billion dollars of investments globally in 2018, and this figure looks set to be exceeded in 2019. France also had a record year, with 365 million euros raised. Europe is the new leader and accounts for 45% of investments, compared with 29% for Asia and 24% for the US.
BNP Paribas and fintechs: global support
In Asia, Europe, the US and Africa, BNP Paribas supports young fintech entrepreneurs to encourage innovation and new ideas!
This collaboration is a powerful driving force for the bank’s digital transformation. In a spirit of open innovation, it encourages new ways of working and will enable us to adapt more quickly to offer better products and services for our customers. The growing number of these partnerships will improve our entire customer journey and deliver a real competitive advantage for the Group.
BNP Paribas has put in place a model for collaboration with fintechs that is built around four pillars: access to banking services, co-creation, acceleration and investment.
“This collaboration model is built around a win-win philosophy and is expected to continue developing over the coming years, generating value for the fintechs, our Group and the overall banking sector.”
Jacques d'Estais, Deputy Chief Operating Officer of BNP Paribas & Head of International Financial Services
This collaboration model is built around a win-win philosophy.
Pillar #1: Access to banking services
Firstly, BNP Paribas offers solutions opening up access to banking services to support start-ups with their development, in France and around the world. Thanks to our network of retail banks and our Corporate and Institutional Banking franchise division, these young businesses can benefit from a full range of products and services, from the day-to-day management of their various needs through to the financial arrangements offered by our subsidiaries. In France, we have set up a network of specialist business centres called WAI (We Are Innovation) focused on innovative entrepreneurs and start-ups.
In France: 30% of start-ups are clients of BNP Paribas*
* Sophie Heller, Paris Fintech Forum 2018
Pillar #2: Co-creation
With the fintechs from its ecosystem, BNP Paribas is developing the co-creation of new solutions for its customers, improving existing services or even its overall performance. For instance, the RISK integrated control function has created a dedicated unit to handle the innovation strategy and facilitate its emergence by connecting the internal and external ecosystems.
The start-ups involved and the various BNP Paribas branches are working closely together, providing the creativity required for the transformation of the business lines and activities, while improving internal processes, systems and tools.
Pillar #3: Acceleration
We are also supporting the development of fintechs through incubators and labs. To achieve this, we have set up partnerships with leading accelerators such as Plug and Play, the world’s largest start-up incubator, based in San Francisco. Housed in Station F in Paris, the international BNP Paribas Plug and Play programme puts the Group’s business lines in touch with international start-ups that can help meet their challenges. It has accelerated 26 fintechs and insurtechs, carrying out 29 pilots, 10 of which are currently in production. The Group is ramping up this type of programme around the world.
In Cape Town, South Africa, BNP Paribas is partnering with the incubator StartupBootcamp. This has been an outstanding success, attracting over 1,000 applications from across the continent last year. The solutions developed there are local, regional and sometimes applicable internationally. Some have even made their way to Europe in just two years.
Thanks to this collaborative innovation-based approach, the Group is:
- identifying and exploring new technologies for banking and insurance, new business models and groundbreaking value propositions;
- meeting the transformation needs of the various business lines to reinvent the customer experience and improve operational processes;
- offering opportunities for the start-ups involved to develop one or more operational solutions with the business lines;
- empowering employees to adopt new ways of working: agile, lean, test & learn.
Pillar #4: Investment
Lastly, BNP Paribas invests in start-ups, directly through full acquisitions or equity interests, or indirectly, through third-party funds. For the Group, this value-creating approach may, with time, improve the financial sector’s experience, benefiting all customers.
We have therefore created Opera Tech Ventures, within BNP Paribas Capital Partners, a subsidiary of BNP Paribas Asset Management, a venture capital fund whose mission is to support start-ups and entrepreneurs with the potential to transform or even disrupt the world of finance.
Similarly, BNP Paribas Cardif, our insurance subsidiary, has partnered with Cathay Innovation to create the investment fund C Entrepreneurs. This structure supports start-ups developing technologies or services that will help invent insurance solutions for tomorrow’s world, notably using artificial intelligence, machine learning, blockchain and connected cars.
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