For most financial services corporations, successful innovation is hard to measure, prove and implement – which is why it often ends up deprioritised. Corporates:

• Tend to be focused on maintaining existing business, rather than developing new products.
• Are put off by the fact that investment in innovation often does not have immediate returns.
• May have been through innovation processes already, but without seeing the results they were hoping for. 

I saw these problems first-hand when working with corporates as the head of global IT at SIX, the Swiss Stock Exchange. Yet, at the same time, it was clear that, without innovation, even the biggest companies can become obsolete.

When we were tackling a project to develop a new product at SIX, I knew we had to take a different approach. Rather than hiring consultants to lead our innovation journey, we decided to set up a platform that connected banks and insurance companies with startups to help develop our product. As a founder myself, I had a hunch that this is where real innovation lay.

The platform was successful, and both financial institutions and startups benefited from this new style of open innovation. From this platform, which received support from most major Swiss banks, Tenity was born.

At first, known as F10, we were a non-profit dedicated to connecting incumbents with startups. But since 2015, we have developed our offering to become both an innovation-as-a-service organisation for corporates, as well as an early-stage VC for startups.

Today, we link corporates in Europe, the Middle East, and Asia with startups that can solve their innovation challenges. Over the years, we have facilitated 150+ accelerators, and 1,500+ startups have graduated from our programmes.

In this article, I want to tell you more about Tenity’s story. I share:

• The issues with how corporates implement innovation
• How Tenity is helping financial corporates with innovation
• How we have helped Julius Baer innovate by learning, collaborating and investing in startups

The issues with how corporates implement innovation
What were the issues that we noticed when it came to innovation at financial corporates? There were three main ones:

1. Corporates struggle to get meaningful (and measurable) results from innovation
   In our experience, many financial corporates struggle to succeed with corporate innovation for a few reasons:

   Innovation is not a process where a corporate can launch a product or service and then see immediate returns. Instead, it takes time, it requires risk and experimentation, and it demands patience.
   
   Given that it can take five to 10 years to see returns on innovation, it is no surprise that many corporates are impatient with this process. Out of hundreds of ideas, only a few may ultimately be feasible, and even those may not have a business impact. Because successful innovation is inefficient, many companies delay and postpone it – often until it is too late.

   • They may lack specific expertise, and it is always slow to source the skills they need. Innovation requires knowledge of technology, regulation, and the market—as well as experience in creativity and ideation. A typical financial institution will have excellent financial services skills, but may not have the right technology and innovative skills.
      
   • It is hard to know where to start. Should innovation come from the marketing budget? The sales budget? A separate innovation budget? And if so, who should lead that project and measure its success. Typically, innovation is one of the first areas to suffer cuts, as it is high risk and rarely brings immediate returns.
      
   • They may get stuck in an innovation process that does not produce results. We call this “innovation theatre”, where teams go through the motions of accelerators and proofs of concept (POCs) but never bring anything to market.
      
   • They do not know how to measure success. Successful innovation is hard to measure. Returns come over a long term, and they are not always directly attributable to innovation processes themselves.

2. Most innovation providers focus on one part of the innovation cycle
   Corporates may be at many different stages of their innovation process:

   • Some may need help accessing the expertise for their specific challenge.

   • Others may need guidance on their innovation strategy.

   • Others may be later in their innovation journey and are looking for help with implementation.
     
     There are external partners that can help with each of these stages. Consultants can help with your strategy, while niche startup platforms can scout potential partners for you. The issue is that these external partners usually only take care of one part of the innovation process.
     
     For instance, if you are at the very beginning of your innovation journey, you may not immediately need strategic assistance. Instead, you may want to first learn about innovation, see what problems people are working on, and understand the technology.
     
     Similarly, later on in your journey, you may be looking for guidance with startup acquisitions or investment. You might be using the best startup scouting platform in the world, but with the wrong innovation strategy, you will be set up for failure.
     
     We were seeing that corporates looking to get started with innovation were having to work with too many different partners, which made it harder to see the bigger picture, introduced more complexity and often led to a lack of ownership – and, therefore, unsuccessful innovation efforts.

3. Most accelerators are not financial services-specific
   The best way to innovate with startups is to partner with accelerators or run your own startup incubator.

   However, the accelerators that financial institutions participate in often are not finance or FinTech-specific. This means they are engaging with a lot of ideas that will not ever solve their specific challenges, and they are working alongside experts who are not concretely relevant to them.

   For example, in an industry with such complex regulatory requirements, you want to work with startups that understand (or have mentors who understand) how compliance works and the potential limitations in the banking industry.

   In financial services, effective startup scouting also requires knowing what a successful FinTech looks like, what type of skillsets are required (e.g. compliance is important) and how the regulations work in the country the startup is based in. Accelerators that do not specialise in financial services will have a harder time since they do not have all this previous experience in place.

   This can be severely limiting if a financial corporate works with an industry-agnostic accelerator and can prevent corporates from collaborating with external innovation expertise altogether.

How Tenity is helping financial corporates with innovation
We built Tenity to solve exactly these problems. We do that in three main ways.

1. Tenity helps corporates get results from innovation by matching them with startups
   We believe that innovation comes from startups and that there is expertise out there that can solve any corporate’s innovation challenges.

   Why startups? Startups are built to innovate. They are a small group of people who are focused on solving one very specific problem, usually with technology. They are agile, they work quickly and they understand how to best use technology.

   By collaborating with them, corporations can speed up product development, get new perspectives, and remain at the forefront of their industry, which are all key to corporate innovation.

   The principal way we help incumbents link with startups is via our accelerator programmes. We run two of our own accelerator programmes per year, and we also run custom accelerator programmes where we scout and select startups for our clients.

   By hosting or being part of the accelerator, corporates get exposure to startups’ ideas and the solutions they are creating. At the same time, startups have the opportunity to pitch their products and access funds. This is different to a regular startup accelerator, where there may be multiple corporates, VCs, and investors competing for investment.

   You can see how a custom startup accelerator works here: How a custom startup accelerator helps corporates with innovation

   These completely custom accelerators have helped companies like SIX collaborate with startups such as Deedster to build a CO2 calculator specifically for the Swiss market.

   bLink is SIX’s open banking platform, which connects banks and FinTechs in Switzerland to offer account access, payment submission, and wealth management services. Deedster is a Swedish climate FinTech focusing on creating climate awareness using data-driven technology.

   bLink collaborated with Tenity to scout and curate startups for a potential collaboration. Deedster joined Tenity’s Open Innovation Programme, letting bLink explore Deedster’s offerings and track record.

   After an initial pitch event, the collaboration process began with a use case exploration, in which Deedster identified what would be required to bring their CO2 footprint calculator to Switzerland. This partnership led to a successful POC for the standardised and easy-to-integrate API solution.

   Read the case study in more detail: Driving Sustainability through Open Banking

2. Tenity supports corporates at every stage of the innovation lifecycle
   At Tenity, we think of innovation as a cycle that takes corporates through three stages: Learn, Collaborate, and Invest.

   • Learn about innovation: Firstly, we provide corporates with the resources and network they need to learn about innovation. This involves gaining exposure to the startup ecosystem and the solutions they work on. We make this happen through community and executive events, as well as our startup database. It helps corporates gain a lot of knowledge about technology and innovation at a lower risk.
      
   • Collaborate with innovative startups and other partners: When the corporate is ready to go, we help them collaborate with startups directly. This can happen either through the custom accelerators we described above, which we will organise for them, or our own incubator programmes.
      
   • Invest in innovative startups: In the final stage, we can help corporates invest in startups. They can invest via Tenity’s FinTech funds or directly into startups themselves. If they need us to, we also offer guidance on investment strategy and acquisition.

   • Since we work with corporates on a custom basis, they can choose to work across all stages or just one part.

     Whatever the corporate chooses, we will not be their typical innovation partner. Rather than a traditional consultancy, we are an ecosystem of FinTech innovators. We see our role as match-making, connecting corporates with the knowledge and experience of startups so that they can create value together.

     As we are always working closely with startup ecosystems, we are much better connected with innovative communities than most other providers. Our investment fund helps to attract the most promising startups, too, meaning that we can offer these to our corporate clients.

3. Tenity provides specialist financial services expertise
   While other corporate innovation consultants can help you with your strategy, for instance, very few will be able to connect you with specialist expertise.

   At Tenity, we are born out of finance, we know finance inside out, and we believe that financial institutions need that level of specialist expertise. Throughout every stage of the innovation process, corporates benefit from our deep knowledge of this field’s network and technology.

   For instance, corporates gain access to our database of 2,000+ FinTech-specific companies, as well as 200+ industry mentors who can share their knowledge. Plus, over the years, we have run over 50 FinTech accelerators.

   We also operate locally. We started at the heart of Zurich’s financial centre and have teams in Singapore, Spain, and the Nordics.

   Combined, these factors enable us to provide realistic innovation that is feasible in the context of local regulation while scouting and selecting specific startups that match your innovation challenges—whether that is in Artificial Intelligence (AI) and finance, climate tech, or WealthTech.

How we have helped Julius Baer innovate by learning, collaborating and investing in startups
Julius Baer is a financial institution that we have been working with for many years. It is a wealth management bank headquartered in Switzerland that operates across 60 locations in 25 countries. Since we have been working together, we have been able to support Julius Baer across the whole innovation lifecycle.

“We are operating in a hugely dynamic environment,” Senab Celebic, Executive Director Julius Baer, explains in our case study on Julius Baer.

“One way to discover new opportunities in such a space is through experimentation. This type of bottom-up innovation is where, for us, Tenity comes in. We have established many successful early-stage collaborations since joining the ecosystem.”

One way we help Julius Baer is by running custom accelerator programmes. For instance, from August to November 2023, we ran their Web 3.0 programme. This involved building a startup accelerator to enable collaboration between the bank and the next generation of Web 3.0 startups in the wealth management space.

The programme was built around four themes that Julius Baer specifically was interested in: distribution and product, Metaverse, client experience, and beyond wealth.

“It is a bit of a laboratory for us,” Luigi Vignola, Head of Markets at Julius Baer, has said about Tenity’s accelerators. “We can throw in questions and see if somebody can come up with a smart solution without using too much of our own resources.”

Another Julius Baer partnership that we facilitated was with the FinTech Vestr. The goal focused on digitising actively managed certificates (AMCs) to increase efficiency and decrease risks—and the collaboration allowed Julius Baer to develop a solution faster and at a lower cost.

As a result of the partnership, vestr signed a contract with Julius Baer in 2018, and the MVP went live later that year. Now, in 2024, the companies are still working together, and vestr has since enhanced the platform with new features, has over 1,000 professional asset managers as users, secured CHF10 million in financing, and has a trading volume of over US$1 billion.

If Julius Baer had decided to develop the solution in house, they would have needed to build a team to develop and maintain the software. Instead, by collaborating with vestr, the bank could access a highly specialised team and a ready-to-use, market-tested product focused on a specific, relevant use case.

By working with us, Julius Baer has learnt about innovation and technology via our events, has developed new products by partnering with FinTech companies via our accelerator program, and is also an investor in Tenity Incubation Fund II, which will give them a financial ROI on their investment. Our work together is a great example of how we would describe successful corporate innovation with an external partner.

We are enabling successful corporate innovation by helping corporates and startups work together
Tenity has now been around for almost ten years, and we are proud of the work we have been able to do with incredible clients. We recently merged with Hackquarters, launched an incubator programme in the Nordics and will soon be announcing the next closing of our FinTech fund.

Today, Tenity is known for helping some of the largest financial services corporates—including SIX, UBS, and Generali—with their innovation needs. They come to us for our local, FinTech-specific expertise, as well as our custom approach to innovation. We hope to continue doing this and helping more corporates implement innovation by working with great startups.

Read the original article here.