New technologies have clearly transformed the way we shop and pay. With the advent of technology, customer experience has gained centre stage across the commerce value chain. Firms operating across the chain, including those in CPG, Retail, Banks and Fintech are in the process of building seamless products catering to the needs of the customer. Apart from the incumbents, new players - mostly startups - have also focused on new products. As a result, global investment in Fintech ventures reached nearly US$3 billion in the last five years and is set to grow to US$8 billion by 2018.
Most firms in the sector solve a specific problem and focus on an explicit consumer segment. However, with intense competition, it looks like players in the ecosystem have been competing with similar solutions addressed to the same (tech savvy) consumer segment. As such, there are very few firms/solutions which have been successful in the market and have made a lasting impact. The result, for the industry as a whole, is multiple solutions in silos.
A concrete step towards addressing this problem was taken by the retailer community by forming MCX. MCX brought all of the top US retailers under one roof by developing solutions which could work across all the major stores. The second such initiative was taken up by Apple where in Apple Pay had on boarded a large number of merchants even before its launch. Such joint development in co-operation with the extended enterprise is a wonderful example of “Open Innovation”.
A similar initiative has surfaced in the heart of Canada’s financial services industry in Toronto. MaRS Discovery District (MDD) in Toronto is one of the world’s largest urban innovation hubs focused on Fintech. MaRS cultivates high-impact ventures and equips innovators to drive economic and societal prosperity. MaRS also provides expert advice and market research, and makes connections to talent, customers and capital. MaRS will connect leaders in the technology and financial services sector with startups developing next generation technology in the payments, financial services, peer-to-peer transactions, alternative lending, and crypto-currencies.
The centre has recently tied up with PayPal and UGO to power financial technology innovation. The new partnership is aimed at connecting leaders in the technology and financial services sectors. In addition, Moneris Solutions Corporation also announced its plans to work with MaRS Discovery District. The collaboration is aimed at aiding startups to help steer the development of market-changing payment technologies. MaRS startup ventures have created 6,500 jobs and, in the last three years alone, they have raised $1 billion in capital and generated $500 million in revenue. All see the wonderful infographic: