Accelerators Aren’t Helping Fintechs, So DBS Banks On Problem Matchmaking Insteadby Fintechnews Singapore November 2, 2018
In DBS Bank’s quest to keep up with the ever-evolving fintech trends and stay ahead of its banking contemporaries, they have launched a programme that would play matchmaker between them or their corporate clients’ fintech problems with the right startups that can solve it.
The Startup Xchange programme has been launched to the Singapore and Hong Kong markets—without coincidence, some of the biggest fintech hubs in the ASEAN region. The programme is focused on four areas of technology that will help businesses stay relevant in the long run: artificial intelligence (AI), data science, immersive media and the Internet of Things (IoT).
The idea is for banks and other companies related to finance technology to more efficiently stay relevant in the long-run. Sometimes it is simply more efficient to team up with a startup more seasoned in that specific trade, rather than trying to develop an in-house solution that could end up being inferior.
Stepping Away From Accelerators in The Fintech Sphere
The Startup Xchange programme is a revamp of the bank’s earlier accelerator programme, DBS HotSpot which is a part of a five-year SG$ 10 million investment made by the bank in 2015 set aside for startup development.
The restructuring of the accelerator comes following an Ernst & Young ASEAN Fintech Census that revealed that “accelerators and incubator programmes have not been very successful with fintechs”. According to the report, only 39% of the companies requested assistance from accelerators.
The Startup Xchange programme is focused on four areas of technology that will help businesses stay relevant in the long run. They are: artificial intelligence (AI), data science, immersive media and the Internet of Things.
The goal is to bring startups in to co-create solutions with banks and they hope, address business problem statements in real-time. Perhaps the bank also hopes that the higher applicability of any solutions formed via partnerships could help a fintech startup further than any accelerator can.
The Programme Has Seen a Couple of Results
Since its pilot launch several months ago, Startup Xchange has matched 21 startups with different DBS Bank units and SME clients. The collaboration, according to a DBS press statement, has resulted in the rollout of 10 different tech solutions, with another 10 expected to arrive over the next year.
DBS Bank also hopes that having their name as an anchor client would help startups as they raise capital with the investment community.
Bidyut Dumra, Head of DBS’ Innovation Group, said:
“Startups sometimes have the brightest minds to develop the most cutting-edge technology solutions but they lack an anchor client and continuous funding. Startup Xchange is great as it helps the ecosystem of startups, DBS and its customers to commercialise emerging technology solutions to quickly achieve shared business goals.”
Some of the solutions that have already been built from the programme, according to DBS, is JIM—a virtual bank recruiter built between DBS Bank itself and impress.ai to help the bank’s recruiters hire wealth managers more efficiently via psychometric profile assessments on candidates.
Another solution built was made for the Zouk nightclub, Foodster. The platform allows customers to skip bar queues by ordering and paying for their drinks via Facebook Messenger and DBS payment channels.
A DBS research found that 78% of accelerators launched in Singapore over the past three years are now defunct, which they see as due to lack of support from more established sponsors or partners. That being said, some would argue that the many failures could be attributed to sub-par startups that rightly aren’t meeting standards for survival. While there are many diamonds in the rough that deserve the polish and help to better cater to the Singapore market, due dilligence by accelerators and programmes like DBS’s Startup Xchange is crucial in ensuring that their support falls into the right hands.
Featured image via DBS