ecosystem

Innovation: A Catalyst
for Collaboration

Mal Cullen, Chief Executive Officer


bulbThis past November, with little fanfare, MIT’s Sloan School of Management introduced a new course focusing on financial technology applications. With the aim of exploring how technology can improve areas such as consumer finance, payments and trading, this is the very first graduate-level course to focus on FinTech in the US. In a sense, it also marks a new era for financial services in general, one perhaps long overdue, in which the market embraces disruptive technologies and their ability to advance financial services. Institutions either embrace technology or risk being left behind.

Consider just how much capital is pouring into the sector, all with an eye on automating, digitizing and optimizing financial services. In the third quarter of 2015, $4.85 billion in investment funding flowed to venture-capital-backed FinTech companies, according to research firm CB Insights. This eclipses the total funding dedicated to the segment in all of 2010 and 2011 combined. In the past two years, FinTech startups have attracted more than $16 billion.

Make no mistake, the future is already here—it is just not as evenly distributed as many in the sector might like. For instance, advances such as blockchain technology and the ongoing evolution of big data promise to irreversibly change the industry. The question then becomes not what the future holds but how will current business models adapt to harness and profit from these developments. Yet, while most other sectors fear disruption, the innovation that ensues in financial services will more likely serve as a catalyst for collaboration between incumbents and startups.

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