Discover the future of banking
31.07.2018 | Innovation
The world of FinTech has seen phenomenal success in recent times. In 2017, venture capital funds invested nearly $17 billion in FinTechs across the world, four times as much as in 2013. As a key player in banking transformation, the BNP Paribas Group ranks among the leading European banks when it comes to investing in these start-ups. Read below to gain a better understanding of the methods and issues behind such partnerships.
Whether through crowdfunding platforms, neobanks or insurtechs, the links between FinTechs (unavailable link) and banks have become increasingly close. Investments issued from funds have grown exponentially, and partnerships between start-ups and banks are multiplying by the day. What are driving these innovations? Profound changes have occurred, which are incentivizing banks to partner with start-ups specializing in technology and innovation knowhow.
For Sophie Heller, COO Retail Banking & Services at BNP Paribas, the banking world today faces three challenges. “First,” she explains, “we see new competitors: telecoms and Big Tech companies are entering the financial services market. Second, client expectations are evolving very rapidly. The use of digital technology, in particular, is establishing new rules and requirements. Finally, clients no longer want to pay for certain services.”
The Group is thus following a policy of co-construction with innovative businesses to meet two main goals—to rethink the banking experience and to accelerate the bank’s positive impact on society. For this reason, BNP Paribas launched a special investment fund that aims to take minority positions in the most promising FinTechs.
client expectations are evolving very rapidly. The use of digital technology, in particular, is establishing new rules and requirements. clients no longer want to pay for certain services.
These funds, managed by BNP Paribas Capital Partner, invest in start-ups that develop services and solutions linked to key functions within the Group (consumer pathways, asset management, etc.). For BNP Paribas, the objective is twofold. On the one hand, it’s about encouraging the emergence of services and products to respond to new needs of our clients and build the banking experience of tomorrow. On the other hand, these investments support the growth of the new economy and innovation.
The fund complements several other bank initiatives. BNP Paribas has effectively opened several acceleration and support programs dedicated to hand-picked start-ups:
Beyond these support measures, as part of its own programs, BNP Paribas engages in initiatives that support dynamic start-ups: inviting Internet start-ups to conferences (Vivatechnology), participating in awards ceremonies, and so on. BNP Paribas is in this way a partner of the Prix David avec Goliath (David with Goliath Prize), which awards alliances between large businesses and very small ones, bestowing an honorary grant of €100,000 as well as business support to the winner.
“Of greatest importance is the ability to respond to all of our individual and business clients by proposing the full range of services that they need,” says Marie-Claire Capobianco, Member of the BNP Paribas Executive Committee. “And our clients want to have the choice—the choice of service model and the choice of relationship.” To serve all clients and expand the range of services requires maximum innovation capacity. Today, this happens through very close partnership with FinTech innovation actors.
Photo header ©Drobot Dean