FinTech start-ups face regulatory, staffing and other business challenges. Teaming up with established firms offers a way forward.
As fresh business models and disruptive technology continue to drive growth in the financial technology (FinTech) space, another headwind for local FinTech companies has emerged: The talent gap.
An industry this innovative and mold-shattering requires a specialized set of skills, but many firms struggle to find people with the requisite technical and finance expertise. When they do, these skills often come at a high price, which may not be feasible for cash-strapped start-ups. Often, small FinTech companies have to compete with large, well-established financial or technology corporations for talent and candidates with these skills are quickly priced out of their league.
In addition to a lack of skills from within, some FinTech businesses also lack outside support due to the small pool of available peers and mentors. This guidance could mean the difference between thriving and folding. In response to this need, there are some public- and private-sector led initiatives in the region that provide FinTech start-ups with the opportunity to grow their companies in accelerator programs.
To address some of these challenges, a growing number of FinTech start-ups are seeking collaborations with larger, better-established corporations. When approached strategically, this type of alliance can bring value to both partners. The financial services institution can provide the investment, mentorship and market that is necessary for the FinTech start-up’s survival and growth. On the other hand, the FinTech vendor can provide the financial institution with the tools for real and meaningful digital transformation.
The result is a range of solutions and services that widen access to financial services for households and businesses across the region, as well as deliver a range of other benefits from faster, more relevant service to greater choice and better value.
One example of this form of partnership is Thomson Reuters’ relationship with FinTech Hive at Dubai International Financial Centre to bring technology, market data access and mentorships to the region’s FinTech start-ups.
“It’s exciting to be a part of an ecosystem that gives us the opportunity to work alongside with organizations that are looking to solve industry challenges in new and innovative ways,” said Nadim Najjar, managing director for Middle East and North Africa at Thomson Reuters.
Through this partnership, the start-ups will:
- Have access to Thomson Reuters data and tools that allows them to test their propositions before going to market
- Gain mentorship with industry experts
- Have a unique opportunity to pitch and present their proposition to some of leading financial institutions in the region and benefit from a strong brand association.
“It’s exciting to think about where the companies we’re going to work with could go,” said Raja Al Mazrouei, acting executive vice president of FinTech Hive. “This industry is only getting started, and we’re taking an active role in shaping it. That’s a very rare opportunity.”
Thomson Reuters has been focusing research and development efforts on initiatives that support the exploration and adoption of new FinTech solutions.
- Thomson Reuters BlockOne ID™: A blockchain identification and rights management wallet capability that facilitates experimentation with Ethereum.
- Thomson Reuters BlockOne IQ™: An Oracle framework that facilitates the deployment of blockchain in financial markets by enabling customers to pull market data into trading systems that run on Ethereum and Corda. BlockOne IQ bridges the divide between blockchain and the technologies that underpin other applications – by providing
Thomson Reuters also continues to engage directly with customers, industry consortiums and bodies; as well as support events such as hackathons to accelerate the development and adoption of FinTech in the MENA region and beyond.