As technology drives disruption across businesses like public transport, retail shopping and food delivery, established companies have a stark choice: Disrupt themselves or be disrupted by somebody else.

Unsurprisingly, many companies have chosen the former path. Consumer goods giant Unilever has Unilever Foundry, for instance, a platform that gives start-ups the opportunity to work with Unilever.

In the Philippines, Ayala Corporation recently announced that it is raising $150 million from its business units to put up a venture capital fund. The fund will allow one of the oldest conglomerates in the country to invest in and work with start-ups across various industries, including data analytics, cloud computing, fintech, and AI.

Standard Chartered Bank, for its part, launched SC Ventures in an effort to promote innovation, partner with and invest in financial technology (fintech) start-ups, and rethink business models. Through the SC Ventures Fintech Bridge, the bank is able to connect with start-ups, investors, and accelerators.

“For the bigger, traditional corporates like us, partnerships with fintechs helps us to more quickly meet our clients’ demand for products and solutions in a seamless, instantaneous, and cost-efficient manner,” says Alex Manson, global head of SC Ventures.

He adds, “As for start-ups, they stand to benefit from the ability to tap into a corporation’s large pool of resources and its…millions of customers, which allows them to grow and eventually be in a position to scale.”

Working with a corporate can also mean opening gateways for start-ups for product development or gaining brand exposure.

“Our partnerships with [fintech start-ups] also allow us to not only tap their technological and human-centered design expertise, but also learn from their agile methods and start-up mindset,” Manson says.

Which is not to say that Standard Chartered is not promoting innovation from within. The bank’s eXellerator innovation labs in Singapore, Hong Kong, London, Kenya, and San Francisco were set up to encourage employees of the bank to pitch their own ideas.

The main challenge, Manson points out, is to evolve the mindsets across all levels of the organization. He says that one has to prioritize creativity over efficiency, to accept failure over sheer risk aversion, as well as “unlearn habits” acquired from large organizations.

Manson believes they have made good progress in driving innovation in the banking space by co-creating solutions to improve the client experience and establishing new partnerships and solutions to change how people approach and think about banking.

“We believe the process of rewiring the DNA of banking involves a combination of innovation from the outside, innovation from the inside, and obviously the creation of ventures,” he says.

Advice for start-ups

For start-ups who have plans to work with corporates one day, Manson says big companies look for start-ups who have client-centric solutions to address their needs.

Another is the ability to collaborate with an open mind. Manson says start-ups need to be able to adjust and improve their product in order to solve real client and business challenges.

He also emphasizes the need for start-ups to be enterprise-ready, yet still have room for growth.

“Fintechs who want to work with financial institutions…must not only have solutions that can potentially be rolled out globally,” Manson says, “they must also be able to cope with banking requirements like data protection and financial crime compliance.”

Manson warns that the process is not an easy one. “[T]here are fundamental differences in how big corporations take pride in structures and processes, versus the more ‘freestyle’ approach of start-ups,” he says.

But he says that so long as both parties have empathy and are united towards a common goal, then the partnership will most likely take off.
Source: mavenlink