HSBC has allocated up to $200 million to invest in fintech start-ups in the hopes of improving the bank’s financial technology. The fund will look to invest globally in both capital market and retail market fintech, reports The Wall Street Journal.
HSBC is not alone in its push to invest more heavily in financial services technology. Swiss lender UBS has created a new system of internal working groups to focus on specific technology projects. from both the IT and the business divisions of the bank.
“Innovation is not an option for banks. Fostering innovation is essential to add value for clients and create a competitive advantage,” Oliver Bussmann, UBS group chief information officer, said.
Global investment in fintech ventures has more than tripled during the last five years, according to a report by Accenture. Investments have grown from under $930 million in 2008 to more than $2.97 billion in 2013.
Investment banks are also getting in on the act, developing accelerator programs, soliciting international players and courting venture capital funding where possible.
Payment processing companies, financial software and businesses that provide big data systems to banks are so far shaping up to be the most popular areas for investment.
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