Globally, many banks are embracing the innovation challenge in different ways. Some become the venture capitalists for start-ups who could become their innovation provider. Others set up in-house innovation labs, encourage employee innovation or join global accelerator programmes. The most recent trend is for banks and innovators to find each other in innovation eco-systems or networks, often facilitated by third parties. Most banks however, follow a multi-pronged approach.
This paper argues that banks need to include working with smaller fintech firms in their innovation strategy. Within the context of banks' legacy systems and the compliance driven regulated industry, smaller fintech start-ups (new and new to the industry) are appropriate and effective collaborating partners. It is perhaps the industry most suited to disruption from the 'outside' in collaboration with the 'inside'.