The Innovation Jam at our 2015 Community Forum (TCF) was a great success. Now we are launching a series of global jams in 2016 to find the best fintech solutions available and help make banking better by cutting development costs and speed up the pace of innovation.
Banks' main challenge today is not the innovative fintechs, but innovation itself. Never has technology played a more important role in banking. It is transforming the way services and products are developed and delivered. It is knocking down barriers to entry, increasing the competition and putting margins under pressure. It is opening up new opportunities and important new revenue streams.
While fintechs are enjoying plenty of publicity, they in fact still make up only a tiny proportion of the total banking sector. Chris Skinner, the independent financial market commentator, puts this year's total global fintech spend at approaching $30bn. Goldman Sachs on its own is thought to have spent up to $3.2bn on tech in 2016.
With banks focusing on innovation, and increasing their budgets for innovation, we are seeing a rise in banks investing in fintech - either by financing incubators, creating their own fintech start-ups, partnering with fintechs, launching their own subsidiaries or by acquisition. Fintech companies can certainly benefit from the investment – there is no doubt that there is a lot of gain for both sides, from collaborating together.
A big hurdle is the cost of coming up with workable ideas. But perhaps the biggest problem is speed. Being first to market is critical but development and implementation is notoriously tough and reaping the benefits at the end also needs a certain amount of good fortune: even experienced venture capitalists typically expect only three out of 10 investments to succeed.
There are plenty of good ideas, but before any can be successful, they need refinement. They need real customers operating a real banking experience. That's why we're launching the Innovation Jam 2016.
We are holding four events in March and April 2016: Miami, Singapore, Dubai and London. At each, selected fintechs will meet banks to jam through applications and solutions. Compelling keynote speakers, including Brett King, American Banker Innovator of the year 2012, and top Temenos executives including David Arnott, CEO, will be on hand to share their insight and commentary.
We opened the submissions process at the start of December and have already had a good response. From the entries we'll select the best 56, taking 14 to each event. The closing date is 4th February 2016.
There are also 100 free places for banks that will be allocated on a first come, first served basis. Those that attend will bring their experience, data, their existing IT, their problems. The fintechs bring their solutions, and the two groups will meet face to face and be able experience these ideas immediately in the cloud. The best two fintechs from each event will be invited to our annual Client Forum to present to over 1,000 financial services professionals.
Any technology provider can apply to participate, size doesn't matter. In particular, we are looking for technology that enhances the customer experience; that facilitates digital marketing; that automates transactions and improves efficiency; as well as innovative new products.
The jams will give everyone the opportunity to experiment with real data, real systems and real problems. Potential customers will be able to see the latest developments that will get them ahead of the competition, see how it interacts with their existing IT and how it addresses their problems, while providers will get to see how their software shapes up in real life.
Ultimately, we hope the Innovation Jam 2016 will help banks and fintechs build collaborative relationships to identify winning solutions, cut procurement, implementation and development times and shorten what is an extremely long sales process for technology providers. That has got to be good for the fintechs, and it's got to be good for banking.