Building Bridges Between The Insurance Investment Industry And Startups

The ancient connections that formed trade routes can be a lifelong study. The Silk Road, for instance, linked Rome to China across a 4,000-mile-long trade network where goods like wool and gold, as well as religious and cultural traditions, went east while items such as silk and porcelain traveled west. The route could perhaps even be considered the first market to literally exhibit signs of a “random walk,” as the process of trading in the earliest times was clearly stochastic in nature.

What’s more, this desire to trade created the need for stable infrastructure, leading to the evolution of road and bridge building techniques. Most notably, the Romans incorporated arches into bridge architecture, and this innovation remains worthy of emulation today. At its most basic, a bridge overcomes an unproductive gap between point A and B, but at its most aspirational, a bridge mitigates some of the friction inherent in conducting commercial activities. As the Romans discovered, an arch enables a bridge to carry heavier loads and ultimately serve more people.

As a not-for-profit, MassChallenge FinTech believes that collaboration between large Financial Services firms and FinTech entrepreneurs will realize the same results of an arch, whose superior strength comes from leveraging both top-down and bottom-up forces. Today’s emerging technologies present enormous opportunities for the Insurance Investment Industry, and this has led to our launch of the MassChallenge FinTech Lab in 2018.

Since 2010, Boston-based MassChallenge has worked with a juried set of startups across industries. As a result of these efforts, MassChallenge startups have generated over two billion dollars in revenue, with 86% of startups still active. Now, global firms have invested their time, experience and capital to the launch of MassChallenge FinTech to ensure it’s success, with MassMutual, John Hancock, Fidelity Investments, Putnam Investments, Citizens Bank and Massachusetts Competitive Partnership as the program’s Founding Partners and Eastern Bank, AARP, Columbia Threadneedle and Wells Fargo have also committed as partners.

In collaboration with its partners’ senior executives, MassChallenge is leading efforts to define firm-specific challenges around areas such as investment analytics, lending, and other product innovations. The firms will articulate these challenges via a “reverse pitch” and MassChallenge will source startups from our global network to apply to solve these pain points. Top startups will be selected to participate in our vertical accelerator from January to June, where each will work closely with a leading partner on a range of activities, from co-development and product validation to strategic investment and advisor introductions.

“Leaders in the financial services industry and FinTech startups can accomplish more together than they could independently.”
– Mike Fanning, Head of MassMutual U.S.

By articulating their own strategic initiatives, firms partnering with MassChallenge FinTech are taking a collaborative approach to innovation and providing entrepreneurs direction and focus at a transformative time in Financial Services. For example, investment professionals have noted that the volume, veracity, and variety of current data strains internal systems and threatens to dampen investment returns amid obscured risks. They have challenged MassChallenge FinTech to identify startups with end-to-end solutions to augment existing processes. Ideally, the solution will combine natural language processing, AI/machine learning, intuitive user interfaces and secure cloud computing to develop a new class of analytic tools for investment or risk professionals.

“To us, innovation means looking for new tools, new technologies and new ways of working that can enhance the businesses we’re already in or give us insights into creating new opportunities,” said Steve Dorval, head of Innovation and Advice at John Hancock. “Connecting with the startup community through the Fintech Accelerator is an opportunity for us to engage with intelligent, passionate people that are solving important problems.

We will see how these ideas complement or compete with what we do, and take away key learnings and share our experience and expertise. We’re looking to partner with startups and grow the Boston Fintech ecosystem to help create and enhance services for the participants, advisors and customers today and in the future. We can’t wait to get started.”

“Leaders in the financial services industry and FinTech startups can accomplish more together than they could independently,” said Mike Fanning, head of MassMutual U.S. “By working closely with startups, we can harness new technologies and services that have the power to transform their businesses and how they meet customers’ needs.”

Ultimately, when FinTech Startups and regulated Financial Services firms partner on defined business challenges, the same basics in designing a solid bridge apply. It is critical that the startups are enterprise-ready and can carry the “weight” of regulatory, legal, risk and compliance requirements. In turn, large firms can serve as “guard rails” in helping startups understand auditing, reporting, and compliance frameworks. Much like in the case of the Silk Road, successful bridges can facilitate lucrative pathways towards advancing the industry.

For too long, partnering with talented entrepreneurs and incorporating emerging technologies has been an arduous journey. In a period of rapid change and technological adoption, it is critical that we work together to define and then successfully bridge the gap that exists today. With the support of the MassChallenge FinTech team, financial services organizations have recognized the value in connecting points that are otherwise difficult to access. We welcome you to join us on this trip.

MassChallenge FinTech is now accepting startup applications for its inaugural cohort; enterprise ready startups should apply at by October 12th using the application discount code MCFTDevon19.

By MassChallenge FinTech Lab