Collaboration: Blockchain


Collaboration between banks and FinTech startups came to focus as financial media expanded on the need for collaboration, and a blockchain summit provided some cogent examples.

“Since 2016, there has been a significant move from banks fearing start-ups and start-ups wanting to disrupt banks, to start-ups and banks working together in harmony,” writes Chris Skinner in “FinTech Collaboration.”

Banks and startups need one another, he continues. “A bank has the customers, capital and credentials; the start-up has the ideas, vision and passion.”

Banks need to adopt emerging technologies like machine learning and blockchain to cut the costs of legacy systems and provide a better user experience. “The deployment of new technologies, however, will take place through a mixture of in-house development and fintech partnerships,” reports Business Insider in covering a new report “Pathways to Profit.”

As Jason Henrichs, co-founder of the Chicago-based FinTEx community and innovation hub, “FinTech is the disaggregation of the service layer. FinTech is the ability to execute transactions directly,” he writes in “What is FinTech.” The startups need the financial institutions to focus their efforts where they will be most cost effective.

Supply-Chain Financing

The Economist this week gives two examples. “Technology is revolutionising supply-chain finance” shows how technology firms have been working with small companies to fill the gap between the time they deliver goods to large trading partners and the time the larger companies pay.

Banks are taking notice and are working with tech companies under a number of models to expand their supply-chain financing business. “More is in the pipeline: banks are exploring, for example, how blockchain technology might align the flow of data and money more closely with the flow of goods,” The Economist writes.

Another article profiles the digital efforts of BBVA, Spain’s largest bank. “Western banks have so far proved largely resilient to the digital disruption that has upended retailing, the taxi and hotel trades, and more. But they know they cannot be complacent. They are spending billions on technology, and are both buying and allying with fintechs.”