Innovative nonbank startups are targeting the consumer market and competing with banks.
The Internet is in perpetual transition. The ever-evolving nature of this channel has banks careening in all directions to keep up with new technology, shifting business models, and customer demands and requirements. The market is too competitive to allow banks to rest on their innovation laurels, and customer demands are forcing banks to shift gears and refocus their priorities. Much of the competition and innovation are coming from nonbanks that are active in the financial services sector. These companies have discovered opportunities in areas where banks have been slow to react or where they believe consumer interest is strong.
On September 21, 2011, Celent participated as a judge and mentor at the Innotribe $100k Startup Challenge. Over 200 companies entered the competition, and the list was whittled down to 10 finalists. The finalists were invited to pitch their wares at an invitation-only session at the SIBOS conference in Toronto. The firms were each given five minutes to demo and pitch their offering. The judging audience voted on the pitches, and the two best companies were each awarded $50,000 in cash. A new report, Financial Technology Startups: The Innotribe $100k Startup Challenge, examines and analyzes the 10 finalists at the Innotribe $100k Startup Challenge. A short profile is provided for each company or product as well as Celent’s impressions.
“Banks need to work on solidifying customer relationships,” says Jacob Jegher, Senior Analyst with Celent’s Banking Group and author of the report. “It is important for banks to understand where the industry is headed, formulate an innovation strategy, and partner with firms who can help strengthen customer relationships and assist in providing a competitive advantage.”
