Some of the biggest names in finance are creating fintech innovation labs to solve the most pressing challenges faced by banks, merchants, and consumers. With recent advances in blockchain, cryptocurrency, contactless payments, and more, finance is primed for disruption.
As fintech plays a larger role in the financial ecosystem, companies are looking for ways to use tech to solve problems and find new opportunities in the space. One popular approach: in-house financial innovation labs.
Companies are turning to accelerators, funds, and labs to try to find the next big thing that will reduce fraud, speed up transaction times, and catch on with consumers for the long term.
Visa — One Market Center
Visa’s Innovation Center aims to increase collaboration among teams working on tech solutions spanning tokenization, payment apps, mobile location confirmation, and more. The success of the One Market Center location in San Francisco has spurred other Innovation Centers across the world, in locations such as Dubai, Singapore, Miami, and London.
Notable projects: Headquartered in Visa’s London Innovation Center, the recently launched Visa Global Transit Solutions program is working to “accelerate seamless, friction-free commuting with contactless payments.” Visa already teamed up with Transport for London on a contactless payment system that the team now looks to expand to transportation hubs worldwide.
Fidelity — Fidelity Center for Applied Technology (FCAT) and Fidelity Labs
Founded: 1999 and 2005
Fidelity’s in-house Center for Applied Technology focuses using advanced technologies to create new solutions ranging from incremental upgrades to large, disruptive ideas. Coupled with Fidelity Labs, the center has expanded its focuses to incubating new businesses, running innovation boot camps, and stress testing new technology in AI, VR, and wearables.
Notable projects: Fidelity Charitable is a public charity that accepts non-cash financial assets. When Bitcoin gained popularity, Fidelity Charitable wasn’t equipped to accept it. Working with FCAT, the charity searched for third-party vendors and iterated testing on compliance with legal and regulatory requirements to be able to accept Bitcoin.
Fidelity Estate Planner was the brainchild of the FCAT and Labs teams. Using pilot program feedback, Labs was able to enhance services by giving Fidelity Financial Consultants the tools needed to make the process easier for both consultants and customers.
Citi — Citi Innovation Labs
Citi’s global network of Innovation Labs is designed to speed up work on disruptive products and technologies like IoT and blockchain. These labs also manage an internal accelerator program (independent of Citi Ventures) and develop strategic partnerships with other companies, startups, and even universities like Stanford, MIT, Columbia, and UC Berkeley. Citi is currently looking to merge its labs into a more cohesive unit.
Notable projects: D10X is an internal growth model that helps Citi employees identify, test, and validate new ideas and solutions. Two products have been launched through D10X include Proxymity, a digital proxy voting platform, and CitiConnect for Blockchain, formed through a partnership with Nasdaq and the Citi Ventures portfolio company Chain.
Associated funds: Citi Ventures identifies co-investor and partnership opportunities with other VC firms. Acting as a minority investor, Citi Ventures looks for entrepreneurs who are working on next-generation technologies in core business areas like financial services, data analytics, and payments.
Deutsche Bank — Deutsche Bank Labs
Deutsche Bank has innovation labs in Silicon Valley, London, Berlin, and most recently, New York (opened in 2017). Deutsche Bank labs connect technology startups with the bank’s internal teams, enabling them to adapt new products and solutions to better serve clients and employees. The labs aim to help Deutsche Bank evaluate and adopt emerging technologies, develop a culture of innovation, and contribute to the bank’s digital strategy.
Notable projects: Eye-tracking solution Eyevido was discovered by the Deutsche Bank Berlin Lab as a very early-stage startup. Working with the lab, the Eyevido team was able to conduct eye-tracking studies of Deutsche Bank’s retail banking websites to improve the user experience for DB customers.
Partnership Fund for New York City and Accenture — Fintech Innovation Lab
The NYC Investment Fund and Accenture jointly run the FinTech Innovation Lab, a 12-week program that focuses on early- to growth-stage startups. Participants get a workspace, mentorship, connections to industry leaders and user groups, feedback on products, and weekly workshops and panel discussions.
At the end of the program, startups participate in a demo day, showcasing their brands to potential investors. Since the lab’s founding, additional labs have been opened in London and Hong Kong.
Notable projects: Pymetrics, a 2014 graduate, is a SaaS tool that taps into neuroscience and AI to evaluate job applicants across a variety of social, emotional, and cognitive traits. Using an algorithm, it recommends candidates to companies. Recently, Pymetrics closed a $40M Series B round.
Cambridge Blockchain, a 2016 graduate, was created as an identity management platform for banks. Using blockchain, multinational banks can put “control of personal identity data back in the hands of the end user,” while also meeting data privacy rules, improving compliance, and enhancing user experience. Cambridge Blockchain recently closed a $7M Series A round led by HCM Capital, the investing arm of Foxconn.
Synechron — FinLabs
Synechron has fully invested in the FinLabs concept, with 12 labs now open across the US, Europe, Middle East, and India. These labs aim to act as innovation hubs for banking customers to collaborate and foster new ideas in interactive spaces.
FinLab users have access to digital specialists, R&D experts, and accelerator programs. The labs specifically focus on technology solutions in blockchain, AI, insurtech, and regtech.
Notable projects: A blockchain mortgage lending application looks to harness the power of blockchain technology and apply it to the mortgage industry. Financial institutions using it can decrease errors, fraud, and processing times while improving workflows.
GFT Technologies — Digital Innovation Lab
GFT’s Digital Innovation Lab focuses on improving the consumer banking experience, both online and in branches, while ensuring banks are meeting security and efficiency needs. The lab has different workspaces users can use for hands-on experiences. Its retail space, for example, lets teams test in a model that mimics a typical shopping environment.
In branches, the lab seeks to use digital technology and IoT to provide a more personalized banking experience for consumers. In 2018, GFT acquired the Insurance and Innovation Performance Center run by V-NEO, which will dramatically increase the size of its innovation lab.
Notable projects: GFT and digital bank Fidor AG formed an innovation partnership in 2016. Running out of the Digital Innovation Lab, the focus of the partnership is creating mobile finance and banking apps. One out- come is the mobile o2 Banking solution, an app built for German telecom company Telefónica Deutschland. With o2, Telefónica Deutschland can offer its own full-service mobile bank to offer customers.
Barclays — Barclays Accelorator (Powered by Techstars)
Barclays Accelerator is a 13-week program run by a full-time fintech-focused team from Techstars. Ten startups are selected from each application group, and cohorts work on finding solutions for challenges in the banking industry. Recent participants have had a heavy focus on blockchain technology.
Successful applications receive full access to Barclays and Techstars networks, mentorship, up to $120K in investments from Techstars, and the opportunity to pitch investors during Demo Days. Startups will be able to work from ultra-modern Rise workspaces with locations in London, New York, and Tel Aviv.
Notable projects: Flux, a 2017 graduate from the accelerator, is a software platform that, when connected with partner merchants, allows users to see a full itemized accounting of purchases from within their banking app. It’s currently live on Barclays Launchpad, where Barclays tests new features with customers, and is being tested at Costa Coffee and Eat.
Santander - InnoVentures
Santander’s InnoVentures is something of a hybrid between a VC firm and an accelerator. With its $100M fund, it actively seeks to invest in technology that has the potential to disrupt the financial industry and make fintech more accessible.
In addition to providing capital, the InnoVentures team aims to help the startups it invests in find a clear vision around how to grow and scale.
Notable investments: Portfolio investments include Kabbage, an automated platform for small businesses to access capital, and Ripple, a platform that allows users (including banks and financial institutions) to send money globally using blockchain technology. Recently, it teamed up with Barclay’s to lead investments in
a $34M Series B round in MarketInvoice, a UK-based business lender.
UBS — Wealth Management Innovation Lab
UBS’ Wealth Management Innovation Lab has a narrow focus on finding innovations and technologies that can help improve the wealth management process for clients. It also looks to arm its advisors with better tools that can help them stand out in a crowded market. The lab uses a “research and development approach designed to incubate creative ideas into testable prototypes within a sandbox environment.”
Notable Projects: The lab created an Amazon Alexa skill called Ask UBS. It’s intended to help answer users’ questions about the economy and wealth management, as well as provide basic information on specific investments.