The disruption of the banking industry by technology has convinced Barclays to establish an accelerator in Cape Town.
The bank on Thursday launched its Barclays Rise programme at the Cape Innovation and Technology Initiative (CiTi) entity The Bandwidth Barn to meet the challenge of financial innovation.
“We fundamentally want to partner with these new technologies because we do believe that banking is being disrupted,” said Steven van Coller, corporate and investment banking CEO for Barclays Africa Group.
Barclays has established the accelerator as part of a collaborative effort with CiTi to foster the growth of finically directed start-ups that would be able to scale.
“Innovation lives and develops in communities where talented, passionate individuals get the support they need to get off the ground and bring disruptive new technologies to ageing industries like banking,” said CiTi CEO Ian Merrington.
Van Coller argued that the establishment of the programme in Cape Town would help start-ups access the infrastructure of the bank.
“If you have a look at fintech in the US or UK, the start-ups have far more access to capital (and) scalability, whereas in Africa that’s all lacking. The more we’ve looked at it, the more we’ve realised a lot of the start-ups need companies that can help them scale.”
The company’s recent investment into peer-to-peer lender RainFin has delivered results.
“The problem is that in Africa and South Africa, they struggle to scale and just being a partner with us: within a year we got accredited at the FSB (Financial Services Board), we got a licence, we got a lot of legal capability,” said Van Coller.
However, Barclays is also reducing its risk by investing in new technology start-ups.
“In a large corporate, when you want to do a project or invest in something, it’s very difficult to do it small increments. The best thing about these types of set-ups is you create the space, people come – you look at the idea. If you like the idea, you put a little bit of money in and you see what happens,” Van Coller said.
Barclays has operations in 15 countries and investing in start-ups gives the bank more flexibility to experiment, he added.
“At any time, if it’s not working, you can then back out without having done all this time, effort and energy. You can run 20 or 30 at the same time: some, you’re going to bring into the firm, some you’re going to let run on their own,” Van Coller said of the investment strategy.
CiTi said that the partnership with Barclays was part of a wider plan to build local financial technology solutions.
“We are engaging with a number of corporates within different sectors on this point, in order to support them and to help them solve their inclusive innovation challenges,” said Merrington. — Fin24
