Australian fintechs well placed as incumbents hook up with one-time raiders

On any given day, the collaboration model increasingly embraced by incumbent institutions and fintech companies means that a major bank will be working with 10-20 fintechs to remove clunky processes that are poison to customers.

The narrative five years ago was that banks would crumble in the face of marauding fintech invaders, but trust (yes, it’s still there) and stability have proved to be confoundingly difficult adversaries.

Business, though, is nothing if not pragmatic, so it’s no surprise that the battlelines in financial services have been redrawn by the ominous appearance of Google, Apple and Amazon on the horizon.

The hope is that incumbency, spiced with a bit of fintech pizzazz, will be a much more defendable position.

The squad of fintechs assembled by each major bank is fluid in number, with the majors getting 3-4 approaches a day, or up 1,000 pitches a year.

It’s a dynamic environment, which is where the Matchi fintech matchmaking platform comes into the picture.

Hong Kong-based Matchi, acquired by KPMG last May, is designed to take the hit-and-miss out of collaboration.

Instead of allowing untested fintechs with big ideas through the door, institutions can choose from 3,700 global solutions on Matchi.

The value-add is that all the solutions are “curated”, or pre-tested.

About 1,000 are fully curated, with the remainder at different stages.

Matchi founder and chief executive David Milligan says a lot of institutions are now asking for a higher level of due diligence — an exercise almost akin to certification.

The platform’s revenue stream comes from successful matches.

Institutions can also use the “innovation challenge” function to present specific briefs to the global fintech market and receive recommendations or solutions in return.

Two of the big four Australian banks have used Matchi, with the platform having connected about 120 leading banks and insurance companies with fintech solutions since its inception in 2013.

A recent example was the mid-sized Canadian bank ATB, which conducted an innovation challenge for a customer onboarding platform that attracted 47 fintech participants.

The challenge was won by the Australian company Avoka.

Matchi has some self-imposed limits on what it will do.

There are 17 themes among its 3,700 solutions, including the likes of blockchain, regtech and next-generation payments.

However, the platform was built to support collaboration between large institutions and the fintech community, so it’s not there to facilitate consumer disruption.

That means you won’t find consumer lending platforms among its solutions, unless the owners are prepared to white-label their offerings.

KPMG global fintech leader Ian Pollari says the local fintech community is sufficiently advanced and innovative to compete against its global peers.

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Source: Australian fintechs well placed as incumbents hook up with one-time raiders – The Australian