To think big, sometimes you’ve got to go small.
Conditioned to using financial might and scale to their advantage, major mutual fund managers and insurers sometimes have difficulty innovating and adapting to change quickly. Executives often need to maneuver through slow-moving corporate bureaucracies and legacy IT systems.
Now, some of the biggest names in Boston’s financial community, including Putnam Investments, Fidelity Investments, and John Hancock, are teaming up with nonprofit MassChallenge to launch an accelerator program for financial technology startups.
In addition to helping with the program’s costs, the sponsors will suggest industry problems that fintech startups can try to solve, and even could consider business or investment deals with the younger firms. MassChallenge, meanwhile, will provide a work space at its flagship location on Drydock Avenue, advice on managing projects, and the opportunity to compete for $250,000 in prizes.
The big guns hope to find new technologies that they would otherwise have a hard time cultivating in-house. The startups who participate, meanwhile, will learn how to work with billion-dollar businesses — and maybe score a career-establishing deal in the process.
“Eight to ten years ago, traditional firms were skeptical about fintech startups. Were they competitors or were they collaborators?” said Devon Sherman, who will oversee the program for MassChallenge. “Now, there’s an understanding on both sides that there’s a real value to partnering.”
And the organizers also hope the new program can elevate Boston’s reputation as a fintech hub. MassChallenge wants other financial institutions to participate as “challenge sponsors,” and already Eastern Bank has signed on.