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11:FS CEO: Deal with Norway’s biggest financial part of trend of how fintech has ‘grown up’

Norway’s largest financial services group DNB (DNBHF) has paid £3m for a 5% stake in a new services firm 11:FS, a fintech challenger consultancy in Britain. 11:FS Foundry helps banks build and deliver digital banking services.

The move is the latest in a line of relationships within the industry showing how fintech has moved into an era of working in collaboration with banks, rather than against them.

“This is ‘the’ trend. Fintechs started with a great deal of arrogance in the first few waves trying more to ‘break’ the banks than help them. I’m glad that the industry has grown up. Really 80% of Fintech is more scary to the big slow moving suppliers to the banks than it is to the banks themselves, particularly with the push towards more B2B than B2C models being deployed,” David Brear, CEO and co-founder of 11:FS. told Yahoo Finance UK.

“Really though this cuts both ways. Banks must have a real emotional intelligence to admit that the skills they have need to evolve. The ones who get this and learn to work and act in a new way will be the leaders for the next few decades.”

The banking and financial services industry has been evolving in two ways. On one side, challenger banks such as Monzo, Revolut, and Transferwise have been disrupting the industry by offering digital-only faster, cheaper, banking, and transferring services than the incumbent banks.

Meanwhile, the banks have been trying to improve and move its services as the population increasingly moves towards a cashless existence. For example, the trade association UK Finance revealed that in 2017, debit card payments overtook cash payments. However, many retail banks in the UK have been beset with IT glitches for years, leading to some CEOs resigning or bosses saying the bank’s reputation has been shattered. It has led to them fire-fighting on one side and then trying to launch their own digital-only bank on the side.

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11:FS Foundry was built to support banks to help them bring digital services faster to market. Brear says this deal between 11:FS Foundry and DNB shows that these kind of partnership can be part of helping banks move on and build the services people want by leveraging the expertise of a company that isn’t laden down by legacy.

“For us at 11:FS we feel strongly that most people make this a technology problem and that its actually about hiring and nurturing talent in to a culture that allows them to thrive. With a great culture and a talented group of people you can achieve great things, whether you’re evolving an existing bank or starting a new one,” Brear said.

“What you find is that the best projects with the best intentions can fail for the ‘wrong’ reasons. I’ve seen people who want to transform their whole organisations but are told they must use technology X, which they know isn’t good but that has four more years on the ROI (return on investment) so the selection criteria is already made for them.

“So what you get is compromises being made that significantly impact the cost to serve and the quality of service to the customer. Neither of which I think you would do if you were a challenger/start up; their focus is based around the customer experience and then finding the technology to make it happen. Ultimately, banks need to realise that there is a better way but also that what got them to today is not will get them to where they want to be next.”

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Aneta Larkins


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