Where to locate?

Incubators and accelerators play a valuable role in bringing key players together.

Where to locate?

In an ideal world, we would connect demand and supply rapidly. There would be dedicated specialist environments where you could scope the relevance of potential projects quickly. Incubators and accelerators go a long way to fulfilling these criteria.

Banks today are partnering with incubators and accelerators to identify and connect with startups. They are investing in fintechs using various engagement models and they are discovering advantages for both parties. And they’re doing all this for good reasons.

Banks have capital, market reach and existing client relationships. Yet they still require specialist innovation that enables them to improve customer experience based on the latest digital tools. On the other side of the coin, startups have the skills and flexibility needed for developing innovations but they typically lack money. Working together through collaboration – or even acquisition – can help both parties get on the fast track to business development and value creation.


To incubate? Or to accelerate? Knowing the basics can guide the right choice

There are no absolute rules for successful selection of an incubator or accelerator. However, here is a quick guide that can help fintechs and banks begin to find the right partner.


The incubator’s primary focus is to find the right startups and give them the support needed to stabilise and grow. The accelerator’s job is to take the minimum viable product from incubation and ramp it up rapidly for real-world implementation. Banks can choose the stage where they can get involved, although a good rule of thumb is the closer to implementation the more it will cost them to play (however, the risk is often mitigated over extended development time).


To make the best choice, know the outcomes you want

As with any choices in life, investors will get correspondingly more out if they put more in to begin with. For this to be achieved, they must have a clear sense of direction, expectations and objectives around key issues. These might include: acceptable levels of ROI, desired impact on brand positioning, development of digital products aligned to strategic objectives, reduction in legacy systems, increase in customer volumes and market share, a more agile culture, and more in-built capacity for on-going digital innovation.

Both incubators and accelerators offer the advantage of speed. This cannot be underestimated. Very early stage deployment at investor sites enables the innovator to gather real world (as opposed to theoretical), data and to adapt quickly to new learning and emerging requirements. This agility can be infectious (in a positive way) for the bank as well, enabling far more agile reactions to customers’ feedback than the slow, down-in-the-weeds processes of traditional requirements gathering, market research and graduated implementation.

In short, incubators and accelerators offer a fast track to focused and geographically convenient high-concentration of innovation talent. This, in turn, offers access to potential solutions to the complex challenges faced by banks today. Can the proposition be made even stronger?


Don’t go it alone. Specialist advice is available

There is a sound use case for involving a connector – either a specialist consulting firm or an internal innovation lab – to act as introducer and potential broker. The organisation taking this role should have access to a wide range of startups and capabilities, through a detailed knowledge of currently available incubators and accelerators. They should have very strong networks and be well positioned to arrange imaginative and fruitful introductions both on the innovation demand and supply sides. They should have the business background and skills to create appropriate and robust working partnerships between bank and startup. And they must have deep domain knowledge themselves, so that they can provide delivery support that extends beyond the limited resources of the startup, where needed.

With strategic evaluation always in place ahead of technology innovation choices and selection of specific fintech expertise and commercial/operational pathways, there is no doubt that incubators can help hatch great ideas while accelerators can validate them quickly and reliably. In fact evaluate, incubate, accelerate should be the mantra of all banks seeking meaningful technology innovations – and of the innovators too.