BFSI firms need to refine their FinTech programs to focus on outcomes rather than partner identification - APRIL 2021 - HFS Research
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BFSI firms need to refine their FinTech programs to focus on outcomes rather than partner identification APRIL 2021 Elena Christopher, Senior Vice President, Research Ramanan Rajagopalan, Consulting Director © 2021, HFS Research 1
Contents Topic Page no. • Executive summary 3 • The fintech enablement ecosystem 4 • BFSI emerging tech demand 2020+: Cybersecurity, automation, and cloud are among the top investment priorities for BFSI enterprises 6 • The BFSI perspective on fintech partnerships 7 • Incubators and accelerators fill the matchmaker role for BFSI firms and fintechs 11 • Among consultants, advisors, and service providers, a few stand out for their differentiated approaches to fintech enablement 12 • HFS Research authors 18 © 2021, HFS Research 2
Executive summary
Going beyond partner identification is a “have-to-have” for BFSI firms’ fintech
program success
As we slogged through the first year of a collaborate with fintechs.
new decade under the shadow of a 2. Cybersecurity, automation, and cloud
global pandemic, the banking, financial are among the top technology
services, and insurance (BFSI) sector is investment priorities for BFSI firms.
weathering this latest storm.
3. BFSI firms are keen to embrace
The pandemic has re-contextualized emerging technologies, but they
digital, and BFSI firms have an even need to focus on partner viability.
greater urgency to consume emerging 4. Incubators and accelerators play the
technologies to accelerate their digital role of matchmakers between BFSI
journeys and usher in effective, firms and fintechs.
increasingly virtual ways of working and 5. Among the consultants, advisors, and
transacting. With this backdrop in mind, service providers, a few stand out for
HFS, with support from Capgemini, their differentiated approaches to
investigated how BFSI firms are fintech enablement.
approaching partnerships with emerging
partners, particularly fintech start-ups The Bottom Line: The magic mix for
and scale-ups that often offer bleeding- fintech scale-up success is the right
edge innovation but are not big enough partner, the right use case, and the right
to pass muster with standard risk and marketing timing – all aligned to
sourcing protocols. achieving a focused outcome. Clear
articulation of ideas by potential fintech
HFS conducted qualitative interviews with partners is just the starting point in the
leaders of fintech programs and fintech program. Though BFSI firms are
innovation labs in BFSI enterprises to keen on embracing innovation, they do
understand the evolving wants and not always know what they want or need.
needs for emerging technology solutions, Refined functional requirements and
appetite for co-innovation and models clear objectives help ensure alignment.
aligning to it, and any impact from BFSI firms can better leverage the
COVID-19. Following are the critical expertise from third-party resources that
findings: offer data-based approaches to
1. The fintech enablement ecosystem assessing fintech qualifications and help
comprises four main categories of refine use cases, assess market
players: venture capital firms, readiness potential, and implement
incubators and accelerators, IT fintech partnerships with an eye toward
services and business` process tangible outcomes.
service providers, and consultants
and advisors that help BFSI firms
© 2021, HFS Research 3The fintech enablement ecosystem
What emerged from our research was a firms just getting established. Scale-
view of the fintech enablement ups are generally funded firms with
ecosystem. We have intentionally established customers and growing
couched it as fintech enablement rather revenue. Established firms are
than BFSI enablement as the various financially stable firms with strong
ecosystem participants largely focus on balance sheets, established
enabling fintechs to fulfill their purpose of customers, and proven BFSI track
delivering meaningful innovation within records. Scale-ups and start-ups are
BFSI firms. As Exhibit 1 shows, the center of often too small to be adequately
the ecosystem consists of addressed by BFSI procurement
standards, whereas established firms
• BFSI firms: Ecosystem BFSI firms
are often already approved partners
include those banking and financial
or meet procurement thresholds. Our
services and insurance firms that
research primarily focuses on start-
focus on consuming emerging tech
ups and scale-ups that are more
innovation to help drive digital
challenged to craft relationships with
transformation and better employee
BFSI firms due to their size.
and customer experiences.
• Fintechs: We recognize three tiers of
fintechs. Start-ups are the very small
Exhibit 1
The fintech enablement ecosystem
Incubators and Service
Accelerators partners
Established
Venture Scale-ups Consultants
Capitalist BFSI firms
and Advisors
firms
Start-ups
Fintechs
Fintech enablement ecosystem
Source: HFS Research, 2021
© 2021, HFS Research 4Beyond the core of fintechs and BFSI inclusive of fintechs. Partnerships with
firms, there is a robust ecosystem of start-ups or scale-up fintechs often
enablers that help fintechs build their involve collaboration on developing
business and align emerging fintechs client solutions and can lead to
with BFSI firms. These enablers may work inclusion in live deals. In these cases,
directly with the fintech, the BFSI firm, or the service partner is almost serving
sometimes both, depending on the as the sponsor of the fintech,
context. The fintech enablers include assuming risk and oversight for the
• Venture capital (VC) firms and funds: partner. In this context, services firms
These firms are dedicated to funding can serve as a bridge between
and enabling fintech growth. Their fintechs and BFSI firms, but the intent is
focus is on capital infusion in not matchmaking for the benefit of
exchange for equity, but it can also the fintech–it’s more closely aligned to
include incubation and facilitating best meeting the needs of their BFSI
connections, including BFSI firm clients.
introduction. There is interesting • Consultants and advisors: Firms with
overlap; BFSI firms often have a VC formal emerging technology advisory
arm, so they can take advantage of or consulting practices like the Big 4
“in-the-family” insight and access. (Deloitte, EY, KPMG, PwC), McKinsey,
Similarly, some service and technology Bain, or Accenture fit here. These firms
firms, such as Capgemini, Deloitte, and are often called on to recommend
Accenture, have venture funds to fintech partners for BFSI clients, largely
cultivate fintechs they may use in their informed by other advisory
solutions when serving BFSI firms. engagements and their own IT and
• Incubators and accelerators: business process outsourcing (BPO)
Incubators and accelerators are businesses, innovation hubs, and
specialist firms that offer access to accelerators. There are also some
resources such as facilities, specialty firms, such as the UK-based
infrastructure, and ecosystem The Disruption House, which offers a
connections, often with a program- data-based approach to helping BFSI
based approach to cultivating a proof firms identify their optimal fintech
of concept (POC) or use case with a partner.
sponsoring BFSI partner. Examples
Despite the existence of a decently
include Plug and Play, the FinTech
robust ecosystem for fintech
Sandbox, and Elevator Lab. These firms
enablement, we were struck by just how
are often matchmakers between
much of the ecosystem’s focus is on
fintechs and BFSI firms.
achieving the grand crescendo of
• IT and business process service
making a match between a fintech and
providers: The BFSI market spends the
a BFSI firm. In reality, this is when the
most on external IT and business
actual work of innovation starts. We
process services with a range of
believe there should be an enhanced
partners from small regional firms to
focus on showcasing the value the
large global providers. These services
fintech enables and the benefit the BFSI
firms have elaborate networks of
firm realizes.
third-party technology partners,
© 2021, HFS Research 5BFSI emerging tech demand 2020+: Cybersecurity,
automation, and cloud are among the top
investment priorities for BFSI enterprises
The pandemic accelerated technology help automate processes that made no
investments in BFSI firms as they strove to sense in a remote work context and to
stay competitive and relevant to their help rapidly cycle through
customers, employees, and partners. As unprecedented work volume, such as the
Exhibit 2 shows, the reaction from BFSI small business loan applications
enterprises planned to increase generated as part of The Coronavirus
investments in various emerging Aid, Relief, and Economic Security
technologies. At the top of the stack was (CARES) Act and similar efforts around
the obvious need for enhanced the world. The cloud rounded out the top
cybersecurity to accommodate mass three, with cloud-based apps and
virtualization. Process automation took infrastructure enabling pockets of
the second spot, with many firms resiliency around the world.
reporting increased use of technologies
like robotic process automation (RPA) to
Exhibit 2
The COVID effect on emerging technology investments in BFSI enterprises
How do you expect COVID-19 to impact your spending for any of the following?
Cybersecurity 69%
Process automation, including RPA 59%
Hybrid cloud or multi cloud 53%
Smart analytics 35% Increase
Artificial intelligence (AI) 24%
5G 19%
Blockchain 18%
Internet of things (IoT) 13%
Edge computing 13%
Augmented or Virtual reality 13%
Sample: Coping with COVID-19 study, BFSI = 165 out of overall 631 major enterprises
Source: HFS Research 2020
© 2021, HFS Research 6The BFSI perspective on fintech partnerships
BFSI firms are keen to embrace emerging technologies, but they need to focus on
partner viability
As part of this study, we conducted fintech solutions internally through their
qualitative interviews with senior leaders labs. They have dedicated leaders for
in BFSI firms whose roles spanned their fintech programs with roles
innovation labs, emerging technology, spanning innovation labs, emerging
fintech partner intake mechanisms, and technology, and fintech partner intake
fintech initiatives. This section provides a mechanisms and fintech initiatives.
deep dive view of what we learned about
As “fintech” no longer implies start-ups
their fintech focus.
(e.g., PayPal is a fintech), BFSI companies
BFSI firms have myriad ways of segmented the fintech landscape into
identifying fintech partners start-ups, scale-ups, and the established
technology companies in terms of
BFSI enterprises have formal start-
revenue, vision, and market availability
up/scale-up accelerator programs to
for their solution.
constantly scout for fintech firms through
multiple channels, such as internal Following are thoughts on fintech
innovation lab networks, internal venture programs from a large international
capitalist arms, and incubators. Some of bank and a large European bank:
them also fund the development of
We do have an Accelerator program to work with the start-ups. We have a network of
innovation labs that works in this program. We also have a hackathon program. Fintechs
pitch themselves to us. We also separately work with investment groups internally.
- Head of innovations and productivity of a leading bank
We work with the fintech firms for tech ideas. We have a way of working with start-ups
through accelerator programs in Brussels and Paris.
- Head of fintech initiatives of a large European bank
© 2021, HFS Research 7BFSI companies have structured • Ability to scale-up (often informed by
evaluation frameworks to assess performance to date)
fintechs, but there is still a lot of gut feel • Staff experience level (e.g., young
involved employees with fresh insights,
experienced leaders, serial
BFSI firms have developed formal
entrepreneurs)
evaluation frameworks – an “index card”
rating approach of sorts to assess • Technology focus that displays a clear
fintechs. A set of consistently mentioned fit with an identified need business
(but not always easily measured) need or an interesting technology with
elements emerged: potential use in the short to medium
term
• Simple and transparent articulation of
technology and business idea or
In our expert interviews, respondents
purpose
almost always coupled logical and
• Sincerity in a relationship tangible assessment measures with
• Strong business case more esoteric measures such as “honest
• Size of company by its annual revenue dialog” and “passion.”
• A clear three-to-five-year plan for the
company
Key criteria for evaluation are three to five years of roadmap, revenue, and having an
open, honest dialog.
- Head of automation, robotics, and fintech intake mechanism of a large
international bank
An additional facet a respondent raised We consistently heard from our BFSI
was the need to assess customer experts that they are absolutely
readiness. The bank and tech might be besieged by emerging tech players that
ready, but that does not mean the want to deliver a pitch on why they are
market is. A good example is a European the next big thing. The evaluation criteria
bank that launched the first pan- also serve as an essential filtering
European digital bank 10 years ago. It still process to help winnow down the
has fewer customers than competitors potential candidates. Fintech partner
who launched solutions much later. identification ideally should be bi-
Being first does not matter if the market directional (e.g., inbound and outbound)
is not ready. to balance supply and demand. When
we queried respondents about how they
BFSI firms will happily leverage expert
managed this balance, all indicated that
external assistance for fintech partner
they used various forms of external
identification, but the benefit realization
assistance for partner identification. The
emphasizes speed, not quality
approaches vary for the firms:
© 2021, HFS Research 8• Some use relationships with external in existence) with external IT and
incubator or accelerator programs to business process service providers;
help identify the right technology Accenture, Deloitte, and Capgemini
partners, often with a regional flavor; were mentioned as examples.
some firms identified include Elevator • Others utilize specialized consulting
Lab, Finastra, FinTech Sandbox, and and analytics firms, such as The
Plug and Play. Disruption House.
• Some use relationships (often already
We work with The Disruption House, a niche benchmarking and data analytics firm. This
firm assesses the business viability of start-ups. Working with them saves time for us.
- Head of innovation and productivity of a large international bank
I get lots of information from external forums and events. They help in understanding if we
miss out something related to adopting technologies.
- Head of automation, robotics, and fintech intake mechanism of a large
international bank
External forums and events help the BFSI despite the existence of formal
firms stay on top of technology trends. evaluation mechanisms
While these myriad approaches offer BFSI Fintech leaders from BFSI firms look for
firms ways to jumpstart their searches for sincere relationships from fintech
optimal emerging technology partners, company leaders. BFSI firms want fintech
HFS understands that the primary benefit leaders to clearly articulate the business
that BFSI firms realize from external case with transparency on the strengths
partners is time savings. While time is and limitations of solutions.
certainly valuable, partners have more to
Additionally, people-related factors, such
offer in the vein of supporting partnership
as resistance to adopting new
viability and success. There must be
technologies, are key blockers to the
more emphasis on achieving results than
success of fintech programs in BFSI
on making a match.
enterprises. Firms are taking steps to
The success of fintech partnerships address this issue internally. A large
depends on people and relationships international bank began conducting
© 2021, HFS Research 9internal workshops and seminars to problems they face and suggest
address the people’s resistance to effective solutions. Leaders offered their
adopting new technologies. The firm asks thoughts on this approach:
its employees to present the key
The hardest thing in the last three years was changing the hearts and minds of people to
make them understand that fintech is not going to take their jobs but help them. It is
about a horse and buggy vs. a car. Either we can be ahead of the curve or behind it.
- Head of automation, robotics, and fintech intake mechanism of a large
international bank
Most of the time, the shutdown happens due to people. It is more about adapting to the
needs of the bank. If they are not able to adapt, they should be stopped.
- Head of fintech initiatives for commercial and private banking in a large
European bank
Fintech leaders in BFSI companies also through license pushes to get business,
feel that lack of execution capability which annoys the BFSI companies.
leads to the failure of fintech programs,
We have observed that BFSI firms are
resulting in the program not going
often willing to let their existing advisory
beyond the proof-of-concept stage.
and IT services firms provide emerging
Fintech programs also fail due to the
tech partners. Firms view this as a benefit
lengthy onboarding processes in BFSI
of the relationship rather than fintech
companies. Other causes of failure are
partners being objectively identified and
technology misalignments and cost-
qualified because of specific criteria.
related items. Lastly, the larger
technology firms drive their agenda
© 2021, HFS Research 10Incubators and accelerators fill the matchmaker
role for BFSI firms and fintechs
To supplement what we heard from BFSI platform. The Disruption House is a niche
firm leaders, we performed research to firm that analyzes the fintech market and
identify the companies that play the technology. Plug and Play offers
roles of incubators and accelerators. accelerator programs twice a year to
Finastra was the company that leaders connect start-ups with BFSI firms. Elevator
most frequently identified. The company Lab has a strong focus on Central and
has partnerships with Accenture, Eastern Europe (CEE). Exhibit 3 shows the
Capgemini, Wipro, Infosys, and others. services that key incubators and
Finastra fuels innovation in the fintech accelerators provide in the fintech
ecosystem through its open banking ecosystem.
Exhibit 3
A view of the key incubators and accelerators in the BFSI fintech ecosystem
Firm Overview of services
Elevator Lab • Elevator Lab helps fintechs develop solutions for banks in CEE.
• Raiffeisen Bank International (RBI) works with Elevator Lab to drive fintech adoption
across its network of banks.
• Elevator Lab has a strong footprint in CEE (14 markets including Austria, 16.8 million
customers).
Finastra • Finastra drives innovation through FusionFabric.cloud, an open development
platform that connects fintech solutions with a range of financial institutions
through open APIs.
• Key partners include Accenture, Capgemini, Wipro, and Infosys.
FinTech • The Boston-based nonprofit organization was founded in 2014 by a group of fintech
Sandbox entrepreneurs and investors.
• FinTech Sandbox facilitates innovation by making data and infrastructure available
to fintech start-ups free of cost.
• The company works with 90 of the top 100 banks globally.
• Accenture’s FinTech Innovation Lab is a key accelerator partner.
• Ernst & Young is a lead partner in promoting innovation in financial services.
Plug and Play • Plug and Play offers a 12-week accelerator program twice a year, connecting the
best early-to-growth-stage start-ups to the world’s largest financial institutions.
• The company launched in 2015 and has accelerated 200+ fintech start-ups and
invested in 50+ firms.
• It operates in New York City, Paris, Abu Dhabi, Frankfurt, Tokyo, Singapore, and China,
and it works with leading banks worldwide, including BNPP.
• Accenture and Deloitte partner with Plug and Play.
The Disruption • The Disruption House was established in 2017, and its headquarters are in the UK.
House • The firm provides an objective analysis of fintechs’ business models and technical
capabilities.
• It helps banks evaluate technology firms for fintech partnerships, saving BFSI firm
leaders time.
• CITIBANK works with this company to understand fintechs’ market viability.
Source: HFS Research, 2021
© 2021, HFS Research 11Among consultants, advisors, and service providers,
a few stand out for their differentiated approaches
to fintech enablement
We complemented our interviews with opportunities for fintechs as part of IT or
senior BFSI leaders with detailed business process services portfolio (e.g.,
competitive assessments of consulting TCS, Infosys, Wipro, Accenture,
and advisory firms and IT and business Capgemini, and Cognizant), and
process services firms to assess their role financial support for fintechs through VC
within the fintech enablement funds. Our research also identified a few
ecosystem. As we suggested in Exhibit 1, providers that offer a differentiated
many of these firms straddle multiple approach to supporting the fintech
categories—offering consulting or ecosystem, going above and beyond
advisory services on fintech use (e.g., traditional approaches. Exhibit 4 provides
McKinsey, Accenture, Capgemini, Deloitte, a concise view of how consulting
PwC, EY, and KPMG), partnership providers support fintech initiatives.
Exhibit 4
A view of the role of consulting firms in driving fintech initiatives
Consulting service
providers Execution Innovation Voice of the customer
Accenture • Formal 12-week • Co-innovation • Good reputation in
qualification program models with Finastra the BFSI industry
through FinTech and FinTech Sandbox • Brand perception of
Innovation Labs • Holistic approach to FinTech Innovation
• Strong partnership change Labs
network
• Dedicated leadership
Capgemini • Formal qualification • Multiple innovation • Good reputation for
program with structured streams: Applied consulting-led
fintech evaluation Innovation Exchange services
mechanism is the key one • Awareness of the
• Strong partnership fintech program
network among existing
• Dedicated leadership clients
• Investments in venture
programs to drive fintech
innovation
Deloitte • Formal accelerator • Focus on building • Good rapport with
program technology advocacy BFSI firms for end-to-
• Partnership with Plug and in niche areas such end strategy
Play and global FinTech as blockchain and consulting in niche
Federation Hub artificial intelligence areas
• Strong digital consulting among the gamut of
arm technologies for the
• Dedicated leadership BFSI industry
© 2021, HFS Research 12Exhibit 4 (continued)
A view of the role of consulting firms in driving fintech initiatives
Consulting service
providers Execution Innovation Voice of the customer
EY • Drives adoption through • Conducts scaling • EY comes across as
partnerships with experiments to a pure-play strategy
governments and FinTech determine the consulting firm that
Sandbox business viability helps the
• Leverages its internal • Thought leadership government bodies
FinTech Hub to provide focus and BFSI firms in
strategy consulting fintech adoption
service
KPMG • Partnerships through • Conducts innovation • KPMG is known as a
Matchi platform challenger program pure-play strategy
• VC focus through High across the globe consulting firm
Growth Ventures though it has an
• Dedicated leadership information
technology arm
McKinsey • Panorama FinTech • Innovation focus is • McKinsey is known for
program and database mainly through high-end strategy
that connect BFSI firms thought leaderships consulting
with a huge set of fintech
companies
• VC focus through Fuel, an
acquisition
• Dedicated leadership
PwC • Formal scale program to • Open banking • Good reputation in
drive innovation through innovation through financial services
partnerships partnerships consulting
• Start-up and ventures • Conducts training in
program educational
• Dedicated leadership institutions
Accenture focuses on the fintech and banking and capital markets business
emerging tech spaces through its operations is complemented by strong
FinTech Innovation Lab and strong relationship management and
partnerships exemplified by its track record of
enduring relationships of 10 or more
Accenture’s FinTech Innovation Lab offers
years. Accenture has strong partnerships
a three-month program for tech start-
with Finastra and FinTech Sandbox to
ups to work with financial services firms,
drive innovative product development
validate propositions, gain valuable
for BFSI firms. Finastra rated Accenture as
insights into the financial services
its best partner in 2020. Accenture has
industry, and develop strong
more than 300 Finastra-certified
relationships with senior industry
consultants.
executives. Additionally, Accenture has a
dedicated leader for fintech initiatives.
Accenture’s domain knowledge in
© 2021, HFS Research 13Capgemini’s emerging tech scale-up Deloitte runs a good fintech program,
program is unique among IT service but it lacks the rigor of Capgemini and
providers and consulting firms Accenture
Capgemini has developed a Deloitte comes closer to Accenture and
qualification mechanism to evaluate Capgemini among the other service
emerging tech companies on good providers when it comes to evaluating
collaboration fit and sustained business fintech programs. It leverages the
success. As part of its emerging tech combination of its co-innovation model
scale-up program, Capgemini offers and end-to-end consulting expertise for
innovation-as-a-service with scale-ups fintech business. Deloitte’s Accelerator
to drive effective collaboration in the program offers institutions the
fintech ecosystem. While this program is opportunity to create the competencies
not specific to BFSI emerging tech firms, needed for growing their innovation
Capgemini has qualified nine firms from capability and working with pre-vetted
the initially identified list of twenty-five start-ups to design and deliver a proof of
companies to work with a bank in digital concept. The company works through its
onboarding, digital payment, and Advisor labs and consulting arm as part of its
3.0. The company used a phased fintech program. Deloitte works with
approach to diagnose the bank’s pain Global Fintech Hubs Federation and Plug
points, identify the potential partners, and Play to drive fintech adoption
orchestrate the partnership model, and worldwide. One of Deloitte’s key strengths
handhold the industrialization of the is its consulting arm, which helps clients
partnership. with technology implementation. Among
its key fintech- and emerging-tech-
Capgemini works with 50+ emerging-
related activities, Deloitte focuses on
tech partners and additional external
driving the adoption of emerging
vendors for innovation and deployment
technologies such as blockchain and AI.
models as part of its fintech program.
For example, Deloitte has invested in
Capgemini drives innovation through the
Fractal labs for AI-driven platform to
Applied Innovation Exchange, which
make financial risk decisions and has
provides access to a unique ecosystem
helped Saga, a company that offers
of start-ups, accelerators, incubators,
blockchain-based currency for
strategic technology, and business
international exchange select the partner
partners. The company works with Efma,
for SaaS solution to manage its treasury
which provides access to 1,200+ fintechs
unit’s back office and its reserves).
and 3,300 financial institutions worldwide.
Though Deloitte has a good fintech
Capgemini also focuses on deployment
program, it focuses primarily on the
through a partnership with FinTechOS,
adoption of emerging technologies in
which has 50+ partners and 40 clients
financial services firms worldwide, and it
across 20+ markets globally. Lastly,
does not execute rigorous scientific
Capgemini participates in open
evaluations of fintech start-ups and
innovation, and it is a key Finastra
scale-ups.
partner.
© 2021, HFS Research 14Consulting firms such as PwC, EY, KPMG, Traditional IT service providers such as
and McKinsey depend on their thought Cognizant, Infosys, and TCS leverage
leadership, databases, and partnership their BFSI partnerships for their fintech
networks to focus on fintech programs programs; none of them have a robust
fintech evaluation framework
Among PwC, EY, KPMG and McKinsey, PwC
leverages its VC arm and co-innovation Among the IT service providers, Infosys
model to offer strategic advisory services leverages its Finacle to drive partnership
in the fintech ecosystem. EY works closely programs with the fintech community.
with government bodies to identify and Combined with the strong go-to-market
help start-ups through its consulting approach in BFSI, this helps Infosys in
expertise, but it does not offer a robust working on digital banking solutions.
evaluation framework to help BFSI firms Infosys is one of the key partners for
identify and work with the right fintech Finastra in driving open innovation. The
partners. The company also focuses on company has invested heavily in
driving adoption worldwide with its localized innovation hubs. Though
thought leadership. KPMG leverages its Cognizant has a strong BFSI focus fueled
Matchi platform and geo-specific VC by investments in digital engineering
partnerships in fintech businesses. capabilities, partnerships, and broad
Though the company uses its technology coverage in digital operations, it does not
consulting arm for downstream have a strong fintech program. The
implementation, KPMG mainly depends company depends on its broader
on its Matchi platform. McKinsey focuses venture capital program and lacks an
on pure-play high-end strategy evaluation mechanism to identify
consulting, which is not as detailed as fintechs. TCS leverages its BaNCS and
the services offered by Accenture and COIN network for fintech business. The
Capgemini in the fintech ecosystem. The company also conducts a boot camp
company leverages its partnership program with start-ups. Wipro leverages
network and comprehensive database its BFSI partnerships and the company-
to help fintechs. It also offers expert wide Wipro Ventures program for its
support through tailored deep-dives, fintech business. Exhibit 5 provides a view
partnership market scans, and of how traditional service providers drive
workshops. fintech adoption.
© 2021, HFS Research 15Exhibit 5
A view of how the traditional IT service providers drive fintech initiatives
IT service
providers Execution Innovation Voice of the customer
Cognizant • Venture capital focus • Pairs consulting • Cognizant has a
through its accelerator with solution better reputation
program families that with North
• Leverages its portfolio of address specific American
digital systems and business needs customer base as
technology, digital (e.g., digital a software service
operations for banking lending, digital provider
and capital markets, advice) and
though there is no offering platform-
dedicated fintech focus based solutions
Infosys • Strong focus on Finacle • Works closely with • Infosys is known as
and partnerships innovation a good IT services
• Strategic focus on BFSI partners execution partner
• Organic focus on in the BFSI industry
• Partnership with Finastra
building innovation
culture through
localized
innovation hubs
TCS • Focus on driving • Leverages its • Like Infosys, TCS is
partnerships through TCS technical expertise also known as a
COIN and BANCs and Business 4.0 good execution
• Offers FinTech training framework to drive partner
programs through its innovations with • The company has
senior practitioners BFSI clients a very good focus
• Leverages its depth in BFSI on relationships
value chain to drive
fintech adoption
Wipro • Leverages its partner • No specific • Wipro has a
network in BFSI and the VC innovation stream reputation for its
program for fintech space strong engineering
• Leverages its BPS business apart from Finastra services among
to digital change agents partnership for customers
such as AI and open innovation
automation in BFSI firms
© 2021, HFS Research 16The Bottom Line: The magic mix for fintech scale-up
success is the right partner, the right use case, and
the right marketing timing—all aligned to achieving
a focused outcome
BFSI firms have developed structured important for the success of the
internal programs run by dedicated fintech program.
leaders for working with fintechs and
• Right use case: BFSI firms are keen on
emerging techs. By and large, they
innovation, but they do not always
identify an internal need and then
know what they want or need. Refined
identify fintechs through multiple
functional requirements and clear
streams such as innovation labs,
objectives help ensure alignment.
corporate venture, and external vendors.
Some of them work with regional • Right market timing: Market readiness
incubator programs to identify the right is the real wild card. It is always hard
fintech partners. BFSI firms have internal to get uptake precisely right, but
mechanisms to evaluate fintechs. BFSI aligning use cases with growth
firms expend significant effort on finding strategy can help.
a partner, but, in reality, the hard work of
BFSI firms can better leverage the
innovation starts after the partner is
expertise of third-party resources to
approved. The key to a fintech scale-up
select optimal fintech partners,
program’s success is finding the right
particularly those with programs with
partner, the right use case, and the right
data-based approaches to qualifying
market timing and aligning them with
fintechs, refining use cases, assessing
clear objectives:
market readiness, and helping
• Right partner: Clear articulation of implement the fintech partnership
technology ideas and functional program.
technology that is proven enough is
© 2021, HFS Research 17HFS Research authors
Elena Christopher | Senior Vice President—Research
Elena Christopher is Senior Vice President—Research at HFS.
Elena leads HFS’ coverage of the Triple-A Trifecta change
agents—AI, automation, and smart analytics. She is also
responsible for driving the industry-specific research agenda
for HFS, digging into the major trends impacting each in-
scope industry and the implications for business process and
IT services. Her industry coverage specialization is Banking
and Financial Services. Elena brings more than 25 years of IT
and business process services expertise to HFS.
Ramanan Rajagopalan | Consulting Director
Ramanan Rajagopalan is the Consulting Director at HFS. Ram
works on custom research studies across various
technologies and industries in HFS. He has over 19 years of
experience in the industry, spanning strategy consulting,
business development, and market research. Ram has
worked with leading IT service providers worldwide.
© 2021, HFS Research 18Acknowledgment A special thanks to the Capgemini team for their valuable inputs and feedback throughout the research and publication of this report. About Capgemini Capgemini is a global leader in partnering with companies to transform and manage their business by harnessing the power of technology. The Group is guided everyday by its purpose of unleashing human energy through technology for an inclusive and sustainable future. It is a responsible and diverse organization of 270,000 team members in nearly 50 countries. With its strong 50 year heritage and deep industry expertise, Capgemini is trusted by its clients to address the entire breadth of their business needs, from strategy and design to operations, fueled by the fast evolving and innovative world of cloud, data, AI, connectivity, software, digital engineering and platforms. To learn more visit www.capgemini.com and follow us on Twitter and LinkedIn. © 2021, HFS Research 19
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