Fintech Spotlight: Citi at the Crossroads of Fintech Disruption
Wednesday, October 14, 2015
his fall, Citi is currently organizing the fourth class of its Fintech Accelerator Program in Israel. The program is one of many fintech related events being sponsored by Citi and is part of an active year for the bank assisting the fintech startup scene. Beyond their accelerators, Citi has also presented a mobile challenge to spur innovation in mobile banking, with participants from across the globe. Among their coming events are global Fintech Expos being held within their Innovation Labs.
While Citi is fully focused on both committing monetary and human resources to advancing innovation in financial technology, the bank is also the target of disruption in its existing business. Growing sectors such as marketplace lending are aiming to replace the need to use banks to source loans while online banks are providing consumers with all they need at a touch of their smartphones without ever needing to enter a branch physically.
The result is that on the one hand, as a global bank Citi has a massive target on its back as new waves of fintech startups compete to grab a slice of their business. On the other hand, the firm is showing that it is not sitting on its laurels and is both creating its own and fostering external innovation that can be used to succeed in the future.
With this crossroad in mind, Finance Magnates spoke with Lyron Wahrmann, Director of Citi Innovation Lab, Tel Aviv, and Ruth Polachek, Head of Citi Accelerator and External Innovation, to learn more about the bank’s fintech plans for the future and for countering digital disruption.
Partnering for the future
Citi isn’t alone with its hosting of accelerators and sponsoring fintech events. Like other banks, one of the common themes of the benefits of supporting startups is to gain a ground level view of innovation in the financial technology sector. In addition, banks like Citi are able to see how they are viewed externally, and how firms plan to compete against them. As such, by partnering with startups, incumbents have an easier path to integrate new technology within their services, and learn where they should focus their existing resources.
In Citi’s case, through their Citi Mobile Challenge, by providing an API of credit and banking information to participating startups, they were able to learn new ways that their existing technology and data could be used to create new solutions such as for handling cross-border payments, efficiency in credit card processing, fraud prevention and gamified financial services.