Future-Proofing with Fintech

Startups are known for disrupting industries. Airbnb came for hotels, Amazon went after booksellers, and Netflix took aim at movie rentals. But there’s one industry where increasingly, the old guard seeks to join forces with the disruptors, and that industry is banking. 

Several factors make a partnership more appealing than an all-out battle. For one, the financial industry is one of the most regulated and deeply-embedded industries we have. The infrastructure was built well before today’s technologies and therefore is difficult and costly to change. However, today’s customers demand seamless experiences for understanding their finances, and banks aren’t tech companies. For innovators in the category, the same factors of regulation and legacy infrastructure make it difficult to break in.

Cue in partnerships between legacy banks and fintech companies, where both parties can benefit. Fraud and identity theft can wreak havoc on a banking institution’s reputation with customers, so there’s an incentive to invest heavily in more robust safety features. J.P. Morgan Chase just participated in the $220MM funding raise by Incode, an advanced identity verification startup. Earlier this year, Goldman Sachs invested in modern banking provider Greenwood, which markets its services directly to Black and Latino customers.

For more banking and fintech cross-pollination, search our fundings using the keyword  “fintech.”