1.
Market Gravity
FinTech vs. Banks: ways to play nicely.
December 2015

2.
2
Barely a day goes by without an announcement
by one corporate or another as they launch their
new startup ‘labs’, ‘incubator’, ‘accelerator’… For
a corporate, playing with startups has never been
more trendy.
Everyone is on the hunt ‘for the next Uber’ and
we now have former heads of global banks
talking about ‘the Uberization of Financial
Services’, as banks struggle to implement new
tech at the same pace as startups like Lending
Club, Betterment, Simple, Funding Circle,
Currency Cloud, Ripple, Stripe et al.
Part of the struggle is that banks have many
different lines of business across retail and
business banking, checking, payments, various
forms of lending, insurance, savings and
investments etc. Meanwhile, startups focus on a
core use case causing the ‘death by a thousand
cuts’ as this screenshot illustrates just some of
the startups disrupting Wells Fargo.
HOT TOPIC | FinTech startups are one of the most talked about features of the
financial services industry, and everyone wants to play….

3.
3
On a recent project engagement, Market Gravity facilitated a global study tour of 30 incubators, accelerators,
startup gurus…whatever you want to call them.
There are many different models and approaches to working with startups from having dedicated resources
scanning the market for startups, the studio model of finding interesting problems then hiring entrepreneurs to
solve them, building your own incubator program / curriculum, partnering with another commercial provider, running
open innovation challenges etc.
They won’t all be right for your business objectives but we’ve pulled out some of our favorite examples from the
likes of Barclays, MasterCard, Target, Wells Fargo and more for you to consider. What does your business really
want to achieve from working closer with disruptive startups?
14 ways your organization can work with startups.
MODELS | …but there are lots of different models out there that may not all be
right for your business

4.
CHALLENGE SOLUTION EXAMPLE
From a corporate
perspective, startups often
seem like a solution looking
for a problem.
Create your own internal
start-up focused on your
problem.
Idealab identify opportunities,
then recruit a CEO
entrepreneur and form a new
jointly-owned start-up.

5.
CHALLENGE SOLUTION EXAMPLE
Working with startups is a
leap into the unknown
without the required
resources in place.
Start small and build out.
Getting everything in place to
do it all is hard so start small,
build towards a goal and
learn along the way.
Bank of Ireland engaged
local startups whilst they
established the tech
capabilities to engage with
FinTech specialists.

6.
CHALLENGE SOLUTION EXAMPLE
Big businesses have 000’s of
employees working on many
internal projects that lack
visibility to startups.
Learn the internal networks.
Hire an evangelist who
creates internal and external
networks connecting startups
with internal project teams.
The Barclays Rise team can
identify the right stakeholders
out of 130,000 employees
and make personal
introductions for startups.

7.
CHALLENGE SOLUTION EXAMPLE
You have money to invest in
startups but you are not a
venture capital company.
Invest in relevant startups on
your terms, e.g. less risk,
more equity, place a team
member on the board,
organize secondments.
British Gas Ignite only invest
in energy businesses with a
social impact, taking more
moderate return expectations
than typical VC’s.

8.
CHALLENGE SOLUTION EXAMPLE
You’re a globally diverse
business trying to innovate at
scale with subsidiaries facing
multiple different challenges.
Set up a global framework
for incubating startups and
roll out local centers
operating autonomously to
make it real.
Telefonica set up Wayra, a
global incubator program
with 14 hubs in 12 countries,
funding over 400 startups in
the process.

9.
CHALLENGE SOLUTION EXAMPLE
Startups may have very little
experience of what is
required for a corporate to
innovate or how they can
work together.
Create a relevant mentoring
program with the right
individuals / companies to
provide advice, help and
introductions to startups.
Startupbootcamp provides a
roster of 400+ mentors
across financial services to
provide sector leading
expertise and introductions

10.
CHALLENGE SOLUTION EXAMPLE
You don’t have the skills
required to build something
with a startup.
Create a mini hit squad that
can quickly work out the
do-ability of an idea.
Pearson created mini teams
with startups using a product
owner, designer and
developer working in tandem.

11.
CHALLENGE SOLUTION EXAMPLE
It’s expensive to get into bed
with startups and develop
talent.
Tap into existing startup hubs
and base some of your
teams there. Have them
observe, interact with and
learn from their neighbors.
WeWork have an
international network of co-
working hubs where
corporates locate and
interact with startups.

12.
CHALLENGE SOLUTION EXAMPLE
Your brand is not recognized
as one that is prepared to
work together with startups
to drive innovation.
Host an open innovation
event or hackathon to
engage developers in your
products, e.g. APIs
MasterCard host a global
hackathon series where
developers compete for a
grand prize to help make
their big idea real.

13.
CHALLENGE SOLUTION EXAMPLE
You want to work with
startups to drive innovation
but local support networks
don’t exist for them.
Nurture local startups to
develop your own innovation
ecosystem.
Communitech has worked
with universities, startups
and companies in the
Waterloo region to develop
Canada’s biggest tech hub.

14.
CHALLENGE SOLUTION EXAMPLE
You need to stay in touch
with the biggest trends
disrupting your customer’s
lives.
Create a tech showcase to
try out new products hitting
the market that you and your
customers can learn from.
Target created the ‘Open
House’ to build an
environment to demo
connected homes products
where customers can learn.

15.
CHALLENGE SOLUTION EXAMPLE
There is so much new
technology out there, how do
we know what will work for
us?
Focus a product and
development team around
solving problems with a
range of new technology
The team at Wells Fargo
Innovation Lab create new
solutions using everything
from Oculus Rift to Smart
TVs.

16.
Dan Taylor,
Managing Director, North America
dan.taylor@marketgravity.com
Iain Montgomery,
Senior Consultant
iain.montgomery@marketgravity.com
To find out more, contact us: