You Don’t Need to Buy a Startup to Innovate

In this contributed article, Director John Eagleson and Analyst Luc Werner address how financial services firms can effectively pursue disruptive innovation by working collaboratively with startups, rather than acquiring them. Sample excerpt: “While banks possess a lot of capital and technology experts, they are committed to servicing their current customers operating under legacy service models. Therefore, it is difficult for disruptive innovation initiatives to compete for the funding, resources and support they need to bring a new technology model to fruition…Startups, meanwhile, are built to pursue disruptive innovation. They have a singular focus on new models, are nimble and can chase markets that did not previously exist. Moreover, they have permission to fail and are generally recognized as a high-risk investment. Established firms can rarely fund and support these types of initiatives internally.”

American Banker / BankThink Blog