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Financial innovation: the future of FinTech
Published on July 28, 2021 26 min
Other Talks in the Series: Open Innovation and its impact on business and society
Open innovation: core concepts and key challenges
- Prof. Henry Chesbrough
- Luiss Guido Carli University, Italy
Open innovation governance modes: what mode Is right for you?
- Dr. Mehdi Bagherzadeh
- NEOMA Business School, France
Open innovation and intellectual property
- Dr. Marcus Holgersson
- Chalmers University of Technology, Sweden
Open innovation policy and public funding for collaborative projects
- Dr. Chiara Eleonora De Marco
- Senior Associate, Capital Projects & Economics, GIS-Global Incentive Service, PwC, Italy
Hello and welcome to this talk on financial innovation and more specifically, on the future of FinTech. I'm Professor Anne-Laure Mention the Global Business Innovation Enabling Capability Platform Director at RMIT University.
Let me start by defining what financial innovation is. In its simple terms, financial innovation refers to the creation of new financial assets or new ways of using existing financial assets. It is also a broad term that now encompasses several products, processes, institutional and service innovations, such as the ATM, mobile banking, and securitization.
FinTech in the broader context of financial innovation is an umbrella term used to describe innovative technology-enabled financial services business models. FinTech is inducing a paradigmatic shift in how financial service firms deliver pecuniary and non-pecuniary benefits to interacting parties. The US Financial Stability Board defines FinTech as technology-enabled financial innovation that could result in new business models, applications, processes, or products with an associated material effect on financial markets and institutions and the provision of financial services.
The world of FinTech is diverse and covers multiple segments, such as payments, insurance, deposits, and lending.
I will now run through a few FinTech cases. Finastra is a great illustration that showcases that accelerating innovation to the end-client comes when you bring uncommon partners to the table and you work together, collaborate, and learn from each other. You then get unexpected outcomes and creativity increases exponentially. This type of collaboration is only possible in an open platform-led organization. Finastra's own journey is to build a platform ecosystem out through FusionFabric.cloud. FusionFabric.cloud is architected on the cloud. It connects to Finastra's core application and makes that data available to third parties to create applications that create meaningful insights or meaningful customer journeys to end clients. In the past, financial services companies and even early FinTech's build fantastic core applications that service retail banking, lending, treasury, and capital market payments. However, going forward, initiatives like FusionFabric.cloud would be the bridges with the FinTech community to openly collaborate and create an ecosystem that is powerful in the combination of players that can come together and create rich new experiences for clients and the customers of clients. Organizations such as Finastra enable big companies to innovate faster. Many of the organizations' clients, 90 of the top 100 banks in the world use their technology. These collaborative relationships, facilitated by Finastra's platform means that the global FinTech is not limited to its own R&D capabilities and developer capabilities anymore. They are now reaching out to the open community and encouraging them to bring their innovation and talents to help the large banks.