Morgan Stanley wants to make it easier to acquire new tech from startups as well as pick up the pace of collaboration amid concerns from FinTechs that partnering with big banks can be slow and expensive.
According to a report in Reuters citing Shawn Melamed, Morgan Stanley’s head of technology business development and innovation office, Melamed said the company is streamlining documentation and expanding the instances where executives can look at new products in an effort to improve partnerships with startups. Melamed pointed to its vendor agreement as one example: Earlier in 2018, Morgan Stanley reduced the document to one page from twenty, which resulted in startups and Morgan Stanley inking agreements in as short as one week. That compares to the typical three months it took in the past. Morgan Stanley also rolled out a portal that employees can use to test technology, noted Reuters. “We have looked at how to improve overly complicated processes,” Melamed said in the interview. “The benefit for us and them is (saving) time and money.”
With FinTechs disrupting traditional financial services, the big banks have been partnering up at an increasing rate. One of the biggest challenges for FinTech startups in working with these huge institutions is that they have lots of procedures and requirements on the books. Because the banks are highly regulated, they have to make sure the tech they acquire is reliable — which often means months of testing and meeting with the startups, as well as a lot of paperwork. Startups by nature have limited resources, so this makes it very difficult for them. But Melamed told Reuters he used to be the CEO and founder of a FinTech startup so he knows the pain the FinTechs are feeling. Melamed said Morgan Stanley hosted a FinTech even in November in New York where 400 executives held meetings with 90 FinTech companies.
Making it easier to work with FinTechs comes at the same time as Morgan Stanley launched WealthDesk, a package of close to twelve new technology tools and services geared toward its financial advisers. Its part of Morgan Stanley’s push to grow its wealth business, noted the report.