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Sang Lee
Sang Lee
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The Next Wave of Innovation in Capital Markets Technology

Post financial crisis, most banks have been focusing on survival rather than innovation. That's changing, however, as more technology startups are entering the financial services scene.

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Kelly22
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Kelly22,
User Rank: Author
5/30/2014 | 4:53:16 PM
Re: Cautious approach?
I think startups have a higher perceived risk because most haven't really demonstrated success. When choosing a new partner, I'm sure businesses are wary of working with a brand-new startup over a more established company that has proven successful in the past. I'm curious to see how this unfolds with analytics, though, since that's a fairly new territory for both new and established companies. It'll be interesting to hear what the panel has to say.
Becca L
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Becca L,
User Rank: Author
5/30/2014 | 4:29:15 PM
Re: Cautious approach?
Interesting point, Kelly. Companies often invest in full fledge companies and ideas or vendor services that don't end up adding much or any value to the firm, that may turn into a dud. Just the cost of taking risks on new products. Do you think that risk is much more significant with startups? Next week I am moderating a panel on enterprise willingness to work with startups to enhance their data analytics.. I will sure to bring up this question.
Becca L
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Becca L,
User Rank: Author
5/30/2014 | 4:25:58 PM
Re: big banks
Great point! The first question these big companies ask now is, okay, you have a great idea/app/program but how can I smoothly deploy it to my 50,000 employees, give them training and keep it updated? Working these elements into a startup's buisiness plan is increasingly a priority.
Becca L
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Becca L,
User Rank: Author
5/30/2014 | 4:23:25 PM
Re: big banks
There's a rise in incubator programs as well. Big firms are taking these fledgling companies with promising talent and big ideas and shaping them into companies that can handle the demand of the big firms and interact with them in a real way. A lot of VCs are offering training/workshop programs around this too.
Nathan Golia
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Nathan Golia,
User Rank: Author
5/22/2014 | 4:55:03 PM
One company stands out
Genscape is significantly older than the other listed companies and is not located in a traditional "incubator." It's admirable that they're able to stay near the top of such a list considering how many companies are chewed up and spit out.
Kelly22
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Kelly22,
User Rank: Author
5/22/2014 | 3:17:51 PM
Re: Cautious approach?
While it would be good to see partnerships increase, I think a careful approach is necessary for firms working with startups that specialize in new technologies. As you say, those who slip up and place a bad bet could end up farther behind than they were before the partnership. 
KBurger
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KBurger,
User Rank: Author
5/21/2014 | 2:17:48 PM
Cautious approach?
These are all good points. I also feel like this scenario (start ups, etc.) is nothing new. We've seen it before in financial services, for example in 1999-2000, the time of the dot-com boom. New and innovative technologies, whether internet, mobile, big data or whatever -- spur more innovation and also a bandwagon effect. Some succeed and grow, some have a kernel of success but can't sustain growth and end up being acquired by a bigger and more established player, and some flame out -- sometimes unfairly, sometimes deservedly. For banks and FS firms that place the right bets, the payoff (financially and also in terms of reputation) is great. Make the wrong bet, and you lose not only $$$ but also momentum, respect and the will to innovate.
Kelly22
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Kelly22,
User Rank: Author
5/21/2014 | 12:37:10 PM
Re: big banks
While there is more risk involved in working with a startup as opposed to an established provider, some of these new companies could have serious potential to bring positive change to the industry. Going along with Jon's point, it would be good to see some of the bigger firms purchase those startups and help them evolve their ideas. 
Jonathan_Camhi
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Jonathan_Camhi,
User Rank: Author
5/21/2014 | 11:09:00 AM
Re: big banks
I would think that some of these startups will be bought by soem fo the bigger firms though, and those bigger firms will be able to help bring those ideas and solutions to scale.
fstechexec
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fstechexec,
User Rank: Apprentice
5/21/2014 | 8:47:10 AM
big banks

Yes, there are many more financial services technology start-ups popping up. Most seem to be formed by former IT/biz folks from the big firms. Although there are plenty of new tools available, I've only seen a few that are actually enterprise ready. What I mean is, the apps and functionality is great, but the tools aren't ready for a big firm. Plus, the established firms are very wary of start ups. They almost never work with them, and they will settle for technology that is inferior as long as it comes from an established provider. Do you see this changing?

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