Well Beyond Mainstream, Fintech Continues to Attract Major Financial Firms

In a slew of recently announced initiatives, ABN AMRO, ING and PayPal headline activity taking place with fintech startups.

It’s been an active fall season in the fintech sector with multiple new accelerator programs being launched. Earlier in the month Barclays revealed that along with its partner, Techstars, they were creating two new innovation labs, in Tel Aviv and Cape Town, to go along with existing programs in London and New York. The Barclays program is one of a growing list of initiatives where traditional banks and municipalities are courting the fintech sector.

Fintech in Canada

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Aiming to kickstart the growth of Vancouver’s fintech sector, the British Columbia Technology Industry Association (BTCIA) announced that it is collaborating with PayPal Canada to launch a Fintech Cluster in Vancouver. According to the BTCIA, the program is the first fintech hub to be launched in the city. Among areas of interest for the program include supporting innovation in payments, alternative lending, peer-to-peer money transfers and crypto-currencies.

Bill Tam, BCTIA President and CEO, commented on the news: “There has been a quiet, natural growth in Vancouver’s FinTech cluster for several years, mostly under-the-radar, and through our collaboration with PayPal, we will begin to showcase the possibilities that exist for Vancouver-based technology to significantly disrupt the financial industry as we know it today.”

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ING partners with Kabbage

In an announcement that is newsworthy, but not surprising, ING recently said that they have formed a strategic partnership with marketplace lending provider, Kabbage. The news comes as ING had participated in Kabbage’s recently closed $135 million financing round.

The partnership is an interesting one, in that ING will be using technology from Kabbage to operate lending for the bank in Spain. A pilot program, ING will use the solution for lending to small and medium enterprises (SME). The partnership will help ING increase the efficiency of processing online lending requests from its customers.

The deal contrasts to other bank/marketplace lending platform partnerships that we have seen in the past. In previous examples of deals, banks have either become referral partners, providing leads of SMEs and consumers that don’t fit their lending requirements, or offering lending capital to marketplace lenders.

ABN AMRO launches fintech investment fund

Also aiming to tap fintech startups as a source of innovation is ABN AMRO. The Netherlands bank has recently launched the Digital Impact Fund. With €10 million of capital, the fund will be investing in fintech startups that ABN AMRO believes are developing products and technologies that the bank can use in the future to provide value to their customers.

The launch of the Digital Impact Fund follows ABN AMRO previously creating an Innovation Centre for internal development of digital technology to be used at the bank. Menno van Leeuwen, Head of the Innovation Centre, commented on the launch of the Digital Impact Fund: “The Digital Impact Fund aims to accelerate ABN AMRO’s own digital transformation, broaden its IT-based services and improve its customers’ experience. That’s why we’re actively seeking partnerships with front runners in technology, security and usability – from mobile banking to personal finance, and from payments to e-identity. Our preference is to invest in European FinTech companies which have already launched a product and are currently in the growth phase”.

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