At least two dozen accelerators and incubators have been launched by financial services firms in the last two years. I believe that in five years’ time, most of these corporate accelerators will have disappeared. Why? A fully-fledged, multi-startup accelerator is expensive to run. The cost of searching, selecting, and providing seed investment and support for startups could easily reach $1 million a year. Many accelerators aren’t focused enough on customer problems or business objectives to deliver return on that investment.
So why are so many banks, insurance, and wealth management firms eager to loosen their purse-strings? Some want to identify and co-opt future disruptors, others are looking to startups for innovation. There’s been a palpable change of tone in discussions of digital disruptors in retail financial services. The ubiquitous stories about voracious startups that want to eat incumbents’ lunch have been replaced by tales of successful collaboration. Financial technology startups deliver innovation, established firms bring customers, and together they live happily ever after.Read more