Morgan Stanley’s Jeffrey McMillan says collaboration is key in fintech

Morgan Stanley’s Jeffrey McMillan says collaboration is key in fintech

It makes more sense for a global banking giant such as Morgan Stanley to collaborate with innovative fintech start-ups than to try to be innovative itself, according to the bank’s chief analytics and data officer, Jeffrey McMillan.

“Probably 75 per cent of our technology that we build is coming from the fintech sector,” Mr McMillan told The Economist’s Finance Disrupted conference in New York. “We don’t really want to be innovators — that’s not what we’re really good at.

“We have $US2 trillion ($2.8 trillion) of assets, 2.2 million ­customers, 16,000 advisers and that’s our intellectual capital. But we’re not known for being nimble and quick.

”But the bank wants to “leverage the best ideas” from emerging financial technology companies who are able to be more nimble.

“What’s happening is the confluence that’s taking place between these two models, and we’ll see how it ultimately plays out but it certainly is an interesting time.”

The second annual fintech conference hosted by The Economist was titled “Collaborate or Die?” in recognition of a growing trend for fintech start-ups to work in partnership with the large ­financial institutions they once talked about disrupting.

Morgan Stanley — headed by the Australian-born James Gorman — has partnered with online lenders including SoFi, Avant and most recently Affirm, offering lines of credit and securitising loans. Rival JP Morgan has a partnership with online lender OnDeck Capital to sell loans to small business customers, while Goldman Sachs has invested in data analytics provider Kensho, ­although Goldman has its own online lending business, named Marcus.

In Australia, Westpac’s Reinventure fund has invested in peer-to-peer lender SocietyOne and the bank has partnered with online business lender Prospa, while Commonwealth Bank has a referral partnership with OnDeck Australia for small business loans and junior bank Auswide (formerly Wide Bay) took a stake in peer-to-peer lender MoneyPlace. NAB decided to create its first ­online business loan product, QuickBiz Loan, in-house.


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Source: Morgan Stanley’s Jeffrey McMillan says collaboration is key in fintech – The Australian