The Findustrial Revolution is a reality that financial services firms globally have to embrace. Driven by tougher regulation, cost pressures, and new and accessible technologies, ideas that would have taken years to ripen are able to go to market and disrupt traditional players at an unprecedented rate. As our very own David Craig described in an interview in the World Economic Forum earlier this year, the mood of CEOs and regulators have shifted from apathy to panic on the question: How are FinTech firms disrupting core financial service businesses? This is evidenced by the explosion of accelerators all over the world in the past two years.
A look at FinTech Sandbox
One of these initiatives is FinTech Sandbox in Boston, a non-profit organization that brings together FinTech start-ups and data providers. By connecting to the right stakeholders in bigger firms, startups are able to access data faster and develop proof of concepts quicker at more favorable commercials. Thomson Reuters is an anchor sponsor of the program, together with some of the largest buy firms such as Fidelity and State Street.
FinTech Sandbox is unique in that it is focused on institutional rather than retail business problems. Of the 39 alumni and incoming startups associated with it since inception two years ago, more than 70% address Institutional use cases, covering novel themes including artificial intelligence, cognitive computing, and machine learning. This is an important distinction as most sceptics believe that this FinTech revolution is plateauing. A recent McKinsey report shows that almost 70% of FinTech startups have honed in on payments, lending, and financing products – leaving financial asset and capital markets still ripe for disruption and innovation.
On March 24, FinTech Sandbox celebrated its first year anniversary with a Demo Day. It was a brilliant opportunity to get immersed in the brains, energy and passion of both alumni and incoming FinTech startups. This allowed me to meet these firms in their natural habitat, learn from their interactions, and understand the value Thomson Reuters brings to the development of this ecosystem.
Driving value for startups
Speaking with these groups, I gathered three value drivers emerging FinTech start-ups get from working with Thomson Reuters through FinTech Sandbox.
1. Depth and breadth of data and technology
Speaking with Thomson Reuters leaders and partners, it was clear that start-ups are finding value in our information ecosystem.
2. Mentorship and business expertise
Through our relationship with FinTech Sandbox, we are able to connect strategically relevant start-ups with mentors who then provide their expertise to interesting firms towards building holistic and innovative client solutions. Marika Vilen, global head of partnerships at Thomson Reuters, calls this people knowledge. Our partners echoed the sentiment.
3. Global distribution network
When start-ups work with us, they are able to access our wide and global distribution network for both market validation and go-to-market activities. One example is the Eikon App Studio program which allows emerging technologies to develop applications on our desktop and access the hundreds of thousands of users of Eikon.
Committed to open innovation
Our participation in initiatives such as FinTech Sandbox highlights the Thomson Reuters commitment to the FinTech ecosystem and to innovation. It reinforces our goal of openness in financial services that aims to connect and engage our customers and emerging players, focusing on understanding the business problems that will move our industry forward.
Ultimately, the experience grounded to me what David Craig calls business-led, technology-enabled disruption. In this day and age where the gap between ideation and creation is being narrowed – driven by highly-skilled talent, lower technology costs, increased collaboration – the growth of startups is expected to continue. Thus, it is crucial for stakeholders in financial services to come together and focus on disruptions that matter, cut through the noise, and leverage emerging technologies to move the industry towards the future.
Visit Innovation @ ThomsonReuters.com to learn more about how we are pairing technology with human expertise and how you can get involved.