Mentorships vs. Labs: The Hunt to Discover Disruptive Technologies
Big banks differ on how to discover the next disruptive technology.
They come in different names ─ innovation labs, technology centers, incubators ─ but they all have the same general goal. Every big bank has set up some type of office with the aim of partnering with fintechs and testing out new disruptive technologies.
This is hardly a new process. WatersTechnology has spent the better part of two years covering the trend from seemingly every angle, looking at the overall state of incubators, in addition to specific regions, such as London, Israel and Asia-Pacific.
The reason I bring this up is because I had the chance to chat with Deutsche Bank's Phil Gilligan, the firm's CIO for the Americas and head of DB Labs, about the opening of the bank's Silicon Valley lab. Gilligan was open, or as open as someone in financial services can be, about some of the areas of focus for the newly-launched lab.
I'm always torn when it comes to innovation labs. Part of me sees the value in setting up a team in some of the biggest technology hot beds. Having a place that specifically encourages internal groups to bring problems to the lab ─ as is the case with Deutsche's program ─ and then the lab mines for new fintechs in the area seems like a smart and useful endeavor.
However, the question always remains: How much of this is for show?
The Power of a Mentor
I spoke to David Reilly, Bank of America chief technology officer, about this topic last June, and he was very critical of innovation labs.
Reilly, who spoke to me following the 2015 New York Fintech Innovation Lab demo day held at BofA's New York headquarters, was more in favor of mentorship programs and conferences. While Reilly's position might seem at odds with an event of that title, the New York Fintech Innovation Lab is actually a 12-week mentorship program for startups, as opposed to an actual innovation lab.
"We've found that's better than building a lab and putting it on Sand Hill Road. That feels good, but it doesn't actually lead to anything," said Reilly, referencing the famous road in Palo Alto, California, known for its plethora of venture capital firms located there.
The Benefit of Labs
Deutsche's Gilligan was adamant that the three labs the German bank now has up and running aren't simply for show. And to be honest, he's right. In less than a year the firm has evaluated over 500 ideas and is on target to analyze at least 100 companies in more detail, followed by an even further evaluation of 50 of those firms.
And while Reilly is certainly right that there are those firms simply setting up shop in London and Silicon Valley for cosmetic reasons, the potential for seeing a tangible benefit to having an innovation lab is there. Deutsche could save millions of dollars if Gilligan is able to implement even just a fraction of the 50 companies the bank takes a closer look at.
This is not a black-and-white issue. Firms, ideally, would be involved in both─ Deutsche Bank is actually a part of the New York Fintech Innovation Lab program. But with the threat of new regulations always limiting IT budgets, it's always interesting to see what horse some of the biggest banks hitch their wagon to in the hope of finding the next big thing.
This week on the Waters Wavelength podcast ─ Episode 12: Open Source, Reg AT, Panama Papers
If you haven't already, subscribe to the podcast on iTunes here. Also, check out our SoundCloud account here.
Food for Thought
- I'm heading down to Miami for SIFMA Ops 2016. If you'll be there, feel free to reach out to me about possibly setting up a meeting. You can drop me an email at dan.defrancesco@incisiviemedia.com.
- Waters Rankings 2016 are open. We are accepting entries for our only awards that are voted on exclusively by the readers. The deadline for entries is April 29. For more information, click here.
- In case you missed it, give a read to my latest feature on open-source software. You can read it here.
- We are under a week away from the North American Trading Architecture Summit 2016, which is held in New York. For more info on the event, click here.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@waterstechnology.com or view our subscription options here: http://subscriptions.waterstechnology.com/subscribe
You are currently unable to print this content. Please contact info@waterstechnology.com to find out more.
You are currently unable to copy this content. Please contact info@waterstechnology.com to find out more.
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Printing this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@waterstechnology.com
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Copying this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@waterstechnology.com
More on Emerging Technologies
Liquidnet sees electronic future for gray bond trading
TP Icap’s gray market bond trading unit has more than doubled transactions in the first quarter of 2024.
Verafin launches genAI copilot for fincrime investigators
Features include document summarization and improved research tools.
Waters Wrap: Open source and storm clouds on the horizon
Regulators and politicians in America and Europe are increasingly concerned about AI—and, by extension, open-source development. Anthony says there are real reasons for concern.
Waters Wavelength Podcast: Broadridge’s Joseph Lo on GPTs
Joseph Lo, head of enterprise platforms at Broadridge, joins the podcast to discuss AI tools.
Man Group CTO eyes ‘significant impact’ for genAI across the fund
Man Group’s Gary Collier discussed the potential merits of and use cases for generative AI across the business at an event in London hosted by Bloomberg.
BNY Mellon deploys Nvidia DGX SuperPOD, identifies hundreds of AI use cases
BNY Mellon says it is the first bank to deploy Nvidia’s AI datacenter infrastructure, as it joins an increasing number of Wall Street firms that are embracing AI technologies.
This Week: Linedata acquires DreamQuark, Tradeweb, Rimes, Genesis, and more
A summary of some of the latest financial technology news.
Systematic tools gain favor in fixed income
Automation is enabling systematic strategies in fixed income that were previously reserved for equities trading. The tech gap between the two may be closing, but differences remain.
Most read
- Chris Edmonds takes the reins at ICE Fixed Income and Data Services
- Deutsche Börse democratizes data with Marketplace offering
- Waters Wavelength Podcast: Broadridge’s Joseph Lo on GPTs