Sponsored Content

Supercharging the next age of fintech through open innovation

The next era of fintech is coming. With the expansion of the financial services ecosystem beyond the traditional borders of banking, lending, and investment, new industries and business models are being unlocked as demand grows for both embedded services and hyper personalization.

Communities are turning to fintech to build services that meet their specific needs and use cases at the most convenient times and places, so it’s safe to say that many companies can benefit from embedding fintech into their services and bolstering customer engagement as a result.

But the world of financial services will continue to become more complex over the next decade. Companies from across industries will rapidly be overwhelmed if they try to do everything themselves as they navigate new forms of payment, identity, assets, channels, segments, and data. Businesses that abstract that complexity away on behalf of their customers, partners, and start-up investments will gain long-term traction.

Traditional players, brands, and emerging providers alike are looking outside of their own four walls for innovation to help them navigate this digital disruption, test new capabilities faster and at a lower cost, and validate the long-term value for their business.

That’s where innovating how we collaborate can make a difference.

Designing a model for the next generation

Simply applying a traditional model is not an option. An entirely new way of thinking is required — and it needs to be grounded in the beliefs that a company can innovate both for itself and for the rest of the financial ecosystem, and that co-mingling and co-creation can exponentially accelerate innovation.

There are a multitude of ways to deliver partnerships that will evolve over time into well-rounded, multi-faceted relationships. These range from incubator and accelerator programs to direct and limited partnership investments to emerging platform marketplaces and inorganic business building. The constant is that a strong technology partner should cover a wide spectrum of core capabilities and innovations on your behalf — whether in transformational technology, adjacent industries, or pre-vetting other fintech propositions — in order to enable laser focus on customer experience, rapid testing, and scaling.

That’s why FIS, a leader in the fintech space, has created FIS Impact Ventures, its corporate venture arm designed to be the engine of future innovation as well as a vehicle to nurture and grow start-ups.

The mission begins with identifying and understanding the disruptive trends that will define the future of finance and commerce, such as blockchain, Web3, data and AI, and digital identity. Driven by those insights, FIS Impact Ventures has been designed around two core functions: A venture investment function that leverages strategic investments in start-ups, venture capital funds, and venture studios as an inorganic accelerant for the business; and a fintech advocacy function with accountability to provide tangible value quickly to each investment and unlock key FIS assets for each startup.

FIS Impact Ventures helps build start-ups from the ground up, advising business leaders from the problem-identification stage all the way through to launch and beyond. With each investment, FIS Impact Ventures commits to delivering on long-term commercial potential — not just act as a passive investor.

Guiding start-ups to scale requires an array of strengths, which is why FIS Impact Ventures brings major advantages and bona fides to its partners. This includes extensive, deep domain expertise, proven technology infrastructure, and a global distribution network that allows them to race ahead of the fintech innovation curve.

This long-term relationship-building and mutual accountability, along with the broadness of its capabilities, is what sets FIS Impact Ventures apart. The secret to their success is focusing on what’s most crucial for startups to develop and innovate, and then executing it quickly. In return, the startups hold FIS Impact Ventures accountable for achieving their objectives.

A platform approach to innovation

Many early stage fintechs have struggled to find a glide path as large software providers and financial institutions complete multi-year modernization transformations. The costs, timelines, and red tape involved to provide fintech capabilities to traditional banking and payments clients are far from optimal. All the while, the financial services market continues to rapidly evolve with new capabilities being envisioned, developed, and delivered.

Within this environment, FIS Impact Ventures was well positioned to make an investment in a platform that could bring FIS and other partner capabilities online faster — which led to the creation of the FIS Banking-as-a-Service Hub. An “as a Service” platform supports rapidly expanding fintechs and businesses that want a lower risk and faster-to-market model to offer both new capabilities and, in some cases, traditional banking and payment capabilities as well.

FIS Impact Ventures has been running an accelerator program for over 7 years, as well as making direct investments in early stage fintechs in a fintech portfolio of 80+ companies. By integrating to the BaaS Hub, partners now have an accelerated on-ramp to FIS’s vast distribution network that can deliver their services across a wide range of industry participants including banks, fintechs and small businesses all on a single platform. Perhaps even more importantly, the FIS BaaS Hub can provide a fast follow to offer a continual stream of differentiating features.

The BaaS hub also makes it easier to co-mingle propositions across industries and areas outside of their core financial services expertise, such as banking and insurance, merchant services, and lending. This allows any fintech or business to create differentiated, experiential propositions, embedded into any digital channel, and tailored to target customer segments.

 

Executing today, shaping tomorrow

The next wave of fintech evolution will be the deployment of API-led banking technology, so that companies in all sectors can integrate low-code or even no-code fintech solutions into their business models. Looking even further ahead to 2030, groundbreaking fintech solutions will contextualize banking services through AI, data, and identity.

Fintech is already changing the pace of ESG initiatives such as green finance or tailored solutions for minority communities aimed at improving financial inclusion. As a trusted partner for their customers, banks and businesses can bridge the gap between intent, knowledge, and action to drive sustainable finance and better outcomes for their customers. With fintech partners, they will get there even sooner.

The start-up investments, platforms and collaboration spearheaded by FIS Impact Ventures will play a unique role in bringing future fintech ideas to market and opening bigger doors.

 

For more information about how fintech collaboration can help your business, visit FIS Impact Ventures.