Fintech (financial + technology) is a buzzword on Wall Street that brings to mind nimble startups slaying stodgy bank “dinosaurs.” The reality is more complicated. Fintech is growing up: Financial institutions are increasingly viewing these disruptors as partners while startups are learning that they need the scale and regulatory expertise of the incumbents. Both sides have a lot to learn, and benefit, from each other, according to speakers at the recent “Fintech: The Impact on Consumers, Banking, and Regulatory Policy” conference at the Federal Reserve Bank of Philadelphia.
“We are actively seeking startups for our members to partner with,” said Robert Nichols, president of the American Banking Association (ABA). He said the ABA has “kicked the tires” of some startups to try to match them with banks, and it has invited five disruptors to present at its annual convention in Chicago this month.
Large and small banks are innovating on their own, too, Nichols said. Capital One has integrated its services with Amazon’s Alexa digital assistant and its video-enabled device, Echo Show. More than 30 banks are now using the money app Zelle, which started in 2011 as a collaboration among Bank of America, Wells Fargo and JPMorgan Chase.