Last year, his role as chief mentor for the FinTech Innovation Lab changed Cristobal Conde’s life — at least, his work life. He had left his job as CEO of Sungard, where he had worked for 28 years, the year before. He left corporate life entirely to become an investor in and board member of several early stage fintech startups (Digital Reasoning and TrueOffice).
“Running a big Fortune 500 company, it’s very hard to stay up to date on technology,” he says. “I think of myself as a programmer, a technologist. I felt the need to reconnect.” After spending two months mentoring fintech startups, “I was feeling withdrawal symptoms,” he says.
This year, the startups participating in the Innovation Lab, a two-month program of mentoring run by the Partnership Fund for New York City and Accenture that culminates in a “Demo Day” at which the companies present to bank executives, needed help in several areas. Some had great products but needed more access to the market. Some had a great product but the wrong pitch; others had a great pitch but a deficient product. Some startups had management issues — the founders couldn’t get along.
This year’s Demo Day took place at Credit Suisse’s Manhattan headquarters on Thursday. A hundred companies had applied, six were chosen to work with technology executives at fourteen financial institutions.
The demos get technology innovations in front of bank executives who might normally miss out, Conde says.
“If you’re a bank procurement officer and you work with 2,000 technology vendors, you’re working very hard to take that down to 1,800 the next year and 1,500 the following year,” he points out. “An unintended consequence of the whole system is it guards against new ideas and new players. The system is rigged against innovation. This program shortcuts that.”
If a banker got a cold call from someone at a startup offering a “clean internet” service that catches malware without slowing down the network, “he would hang up the phone and say it’s too good to be true,” Conde points out.
But Centripetal Networks, one of this year’s startups, got to give its pitch to the standing-room-only group of bankers. The company’s appliance filters network traffic to remove common threats such as malware to provide a “clean internet.”
“There are more than 400 million types of malware out,” says Steven Rogers, CEO of Centripetal. “It’s hopeless”
Rogers says his company’s RuleGate technology can compare incoming traffic against millions of rules and policies. It gathers cyberintelligence about fraudsters. Four of the company’s bank mentors are testing the product, he said.
“I think what they’ve done is truly disruptive,” Conde comments. Inktank presented a storage virtualization system based on open source code its developers wrote called Ceph. It handles block and file storage and works on any hardware.
“The storage market will grow to $55 billion by 2020,” says Bryan Bogensberger, CEO of Inktank.
Typically companies that start with one storage vendor, such as EMC, have to continue buying from that vendor because of a lack of interoperability, he says.
“The ability to have software decide which storage device to use when, and to use commodity storage devices of many different makes and models, could save hundreds of millions for the industry,” Conde says. “These guys were very clever to do open source first and build the company second. That gives them credibility.”
Dashlane showed a secure digital wallet and password management product. As consumers shop on websites, the software can auto-fill their registrations, logins and payment information. It stores the customer’s reward point information, letting the person pay with a combination of points and cards from different accounts. The merchant gets cash and the bank gets notification of points to be deducted from the account.
The average user spends about $5,000 online with Dashlane, its founders said during their demo.
The product could help banks provide a better customer experience, Conde believes. “Banks are looking to create more trust between them and their customers,” he observes. “Banks can offer this to customers, it’s free, and it will take care of their passwords and reward points.”
ScrollMotion showed software for making presentations more engaging – an alternative to PowerPoint. It could be used by private bankers and others with a sales role within a bank. It could be used to present content such as employee manuals on tablets.
“Our goal is to be the gold standard for tablet-based interactive content for financial services companies,” said Josh Koppel, co-founder and chief creative officer of ScrollMotion, during his demo. “Tablets will change life inside companies.” The company recently received $19 million in C-round funding.
“Presentations don’t have to be boring,” Conde comments. “I personally hate PowerPoint. At Sungard I banned it.” What did he use for presentations? “I would talk. I would write.”
Narrative Science, one of Bank Technology News’ Top 10 Tech Companies to Watch last year, uses artificial intelligence to “read” data in tables and turn it into text.
“A lot of people find it easier to read text,” Conde notes. “Even people who say they prefer numbers, that’s true until the fifth page of tables.”
“We create English reports that explain what’s going on with data, turn it into something business side can understand,” says Narrative Science CTO Kris Hammond.
It could be used, for instance, to create a portfolio report for a wealth management client – analyzing market trends and the client’s holdings. This could be an on-demand, daily report. “If there’s story to be told, we can tell it,” Hammond says.
Several banks are piloting Quill, he says.
OpenFin’s software that lets banks repurpose thick-client software as thin client.
“OpenFin lets apps be built once and run on Windows and Macs,” CEO Mazy Dar explained at the event. “The apps look, feel and work like installed apps.” Companies can save the time of installation to individual desktops and implement one security standard across all software. Dar said these applications can be easily integrated with one another.
“It’s delivering data to a sandbox that goes away when the session is over,” Conde says. “Everybody has the problem of taking fat clients that run on PCs and Macs to a more secure environment.”
All the companies in the Innovation Lab, like fintech startups in general, have to meet the exacting demands of the investing world.
“When I walk into the room, a company’s got to solve a problem,” says Douglas Atkin, senior managing director, venture investments at Guggenheim Partners, who also acted as a mentor to some of the companies. “A lot of the companies I see are technologies in search of a problem to solve. In simplistic terms, we’ve got to help people make money.”