Fear of fintech disruption is still common in banking, but for Bank of the West, “fintech” means opportunity.
The San Francisco-based bank is working on deepening its links with Silicon Valley neighbors, and has a hackathon planned for June 17-19 in concert with parent BNP Paribas.
“Fintech is already a partner to the banking sector,” Andy Harmening, vice chairman of consumer banking, told Bank Innovation. But it is seen as attacking banks because fintech has gotten attention for a number of innovations in sectors challenging to banks, such as microfinance, Harmening said.
“Banking has proven to be a pretty resilient industry over time,” Harmening said. Instead of fretting about disruption, Bank of the West is focusing on partnership and building relationships with innovative companies.
Harmening recalled an informal internal discussion about the number of fintech partners the bank has already. The answer? “North of 20.” And that number will only go up in the future.
Fintech startups also show ingenuity around not just technology, but processes, Harmening said, and this should be educational for banks. But the overall threat of fintech companies replacing banks is not top of mind at Bank of the West, which benefits from its proximity to the world center of innovation in Silicon Valley.
Bank of the West is overseeing the San Francisco end of the June hackathon, which will simultaneously take place in London, Brussels, Paris, Rome, Berlin, Warsaw, and Istanbul. The hackathon, which is the first stage in a yearlong process,, will revolve around two themes: home-buying, and budgeting. For the bank, the process will be about studying the innovation process. “Learn, learn, learn,” Harmening said.
After the “ideation” stage in June, selected companies will participate in a bootcmap from July to November, a demo day on Dec. 2, and then a prototyping process in 2017. A video is below. (Friendly tip: you may want to lower your volume before playing it.)
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