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Last week, consulting firm Accenture completed its latest 3-month long accelerator program, dubbed FinTech Innovation Lab, which presents startups to mentors, banks, and insurers to receive guidance on a range of business issues.

key reasons global fintechs partner with conventional financial services firms

After receiving over 300 applications in October 2018, the company selected 20 fintech startups to participate in the accelerator in January this year, which were chosen with the help of Accenture’s banking partners, Tom Graham, program director of Accenture’s London FinTech Innovation Lab, told us during an interview.

Business Insider Intelligence attended Accenture’s FinTech Innovation Lab Graduation Day 2019, where we gained insight into what this sort of accelerator could mean for the fintech industry.

Here’s what it means: Innovation labs offer startups an opportunity to lean on experienced players to improve new tech’s likelihood of success, while providing banks with a channel to find innovative partners.

  • Startups gain access to the expertise of established brands, while also being able to form connections with banks. Especially when working on a business-to-business (B2B) model, it’s important for fintechs to know exactly which pain points banks are struggling with. By working closely with a variety of banks, startups can ensure that their products fix these problems, and they can potentially tailor their solutions for specific banking partners in the program.
  • Banks can use the solutions from participating fintechs to fuel innovation within their own business.Being able to select the fintechs that participate in an accelerator makes it likely that banks can find suitable partners for specific business needs. Working with a range of fintechs allows them to get insights into new developments in the space and explore potential partnerships with fintechs. Additionally, by not owning the accelerator, banks can ensure that they don’t have to spend too much time and too many resources on it.

The bigger picture: Accelerators can jump-start the development of emerging fintechs, but success is not guaranteed.

Fintechs need to focus on differentiating from the competition, even within an accelerator.Getting the right contacts with established incumbents can be difficult for new startups; however, it’s important for them to build out their network if they want to partner with incumbents in the field.

Getting these contacts is great news for startups, but fintechs participating in accelerators should not assume future success — especially as similar programs continue to pop up globally, potentially minimizing the actual competitive advantage of participating in one.

Hence, fintechs should focus on how they can make their solution different from the competition — especially during their time in an accelerator — to ensure that participating banks choose their solution over others.

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SEE ALSO: Latest fintech industry trends, technologies and research from our ecosystem report

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