Most of the financial companies are accustomed to doing deals of bigger sizes as well as making big changes and innovating their products. However, it seems like the time is just right for the big financial companies to tie up with the smaller start-ups. Only when that is done, the legacy IT systems, as well as the bureaucratic hurdles, will be eliminated from the financial companies.
Big financial companies tying up with Fintech start-ups:
Putnam Investments, Fidelity Investments, John Hancock are all tying up with the non-profit organization by the name of Masschallenge. This non-profit organization is actually an accelerator program for the Fintech start-up companies.
These companies are tying up with the non-profit organization in order to help Fintech start-ups to grow bigger. The program will be launched in January. It will be specifically lucrative for the local Fintech companies.
In addition to helping them with the cost, they will also be suggesting the Fintech start-ups regarding the problems which they should think about solving. Also, there might be some investment deals by the bigger companies as well. On the other hand, the non-profit organization is also offering $ 250,000 in prizes to the Fintech start-ups. As a result, it is a lucrative opportunity for most of the Fintech start-ups.
The bigger companies are trying to find some innovative products and newer technologies with the help of this challenge. As a result, they will be able to tie up with those companies or acquired those companies outright. As a result, they will be able to certainly provide breakthrough products to their customers which will significantly increase their business.
According to Devon Sherman, who will be overseeing the competition on behalf of the non-profit organization, around a decade back, most of the financial companies were actually skeptical about the start-ups. However, this is not the case anymore. They understand that there is significant value for the bigger financial companies to tie up with the financial start-up’s as well. As a result, they are not shying away from the challenge.
It remains to be seen the benefits which the Fintech start-ups are able to get from this challenge. Up until now, it seems like it is a win-win situation for the big financial companies as well as the Fintech start-ups. Both of them will be able to work in conjunction in order to provide better products. Keyword: Fintech, MassChallenge, financial companies