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June 26, 2015

Here's How To Innovate Finance

Posted by Mohit Joshi (View Profile | View All Posts) at 6:29 AM

Innovate Finance: The Future of Money [Source: https://www.youtube.com/watch?v=CZecVfvntNI]

Think of a place where your workday involves communicating with businesses that are open in both Hong Kong and New York. I'm betting big bucks that the place you're thinking of is London. Its markets are open when the Far East's markets are revved up, and later in their day, the London exchanges are still open when New York's markets hear the bell ring and begin their trading. It is a city perfectly positioned to connect every investor and business on the planet.

Over the years, London has made a name for itself as a community that supports accelerators -- groups of startups in which the technorati deem worthy of investing. It is no wonder that Level 39, Europe's largest accelerator space, is housed in London, at One Canada Square on prestigious Canary Wharf. Among them is Innovate Finance, an organization whose mission is to promote British startups in the financial services sector.

For startups, the almighty dollar (pound, in this case) is what cuts through endless pitches, networking at cocktail parties, and office visits. Liquidity allows innovative engineers to cut to the chase. They can start building and marketing their dreams immediately. But is capital all it takes? Think about this: Suppose a bright, young entrepreneur in the financial services space successfully pitches a product that the big banks aren't even thinking about at the moment. They have the smarts, they have the idea, and most importantly, they have the funding. But what they don't have is the ability to scale. If you've ever been part of a successful startup, then you know why the ability to scale up fast is vital to your organization's success. That's why it's imperative for startups to partner with an established technology company that can help them scale up - and rapidly.

A prestigious organization like Innovate Finance in London is vital to the financial services ecosystem because even the largest banks on the planet need startups. To be sure, they certainly don't want startups as competitors. Yet there are plenty of business areas that the global banks have all but abandoned and financial startups are looking at from a fresh and tech-savvy perspective. Remember when you could walk into a neighborhood branch and the loan officer knew you and your family? Many global behemoths don't remember those days, but customers do. The big banks need startups that are borne out of groups like Innovate Finance to work with them and give them a dose of entrepreneurial inspiration that large organizations sometimes lack, especially when it comes to customer service. Going back to the aforementioned example, a startup could digitally recreate a highly personalized experience for a customer seeking a loan so that he doesn't miss his loan officer who knew him by name. And the big banks give them mature guidance and funding. It's a win-win proposition.

You might be wondering why Infosys, a global technology behemoth in its own right, would be interested in startups. Well, it's because three decades ago, we were an innovative startup ourselves. We know how the system works because we were there. In fact, to ensure that we never forget what it was like in the old days, we established the Infosys Innovation Fund to incubate and to encourage young, entrepreneurial technologists. We can learn from them and they can learn from us. Truth be told, the fund is more than just a reminder to our company's veterans. It's about taking young innovators seriously and backing them with the money to get a great idea off the ground, especially in areas of next-generation technologies like machine learning, automation and artificial intelligence.

I think we should all take notice of what's going on at Innovate Finance and at Level 39 in London. These ingenious FinTech startups are pinpointing the much-neglected spaces in banking services and applying new, digital solutions to them. In time, Innovate Finance could give birth to the global financial institutions of tomorrow. But for now they need incubation and the ability to scale up fast.

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