The biggest challenge for startups looking to work with Wall Street firms
Earlier this month, for example, JPMorgan launched a trial project with Blythe Masters' blockchain startup.
But there's a major obstacle for financial technology, or fintech, companies that want to join forces with traditional firms, and it's not about cultural differences.
"There's a lot of legacy technology at these big institutions, and it's hard to integrate with their systems," said Jon Stein, CEO and founder of the robo-adviser Betterment, in an interview with Business Insider.
Betterment in 2014 partnered with Fidelity's Institutional Wealth Services unit. Fidelity announced in November that it would not to renew their one-year contract.
The other challenge that Stein highlighted when it comes to partnering with big financial firms is the regulatory environment.
"We are fully regulated as an investment adviser and a broker dealer," he said. "Other companies have different regulatory regimes."
As soon traditional companies partner with Betterment and invest a percentage of their capital, Betterment becomes subject to the same regulations as the much larger firms.
It "really complicates things for partnerships," Stein said.
At a recent conference organized by the Department of Commerce, Stein and some 40 other fintech entrepreneurs and folks from large financial institutions discussed how to work together on issues like regulatory constraints.
Secretary of Commerce Penny Pritzker suggested at the event that they combine forces and bring a handful of specific issues to regulators in Washington.
"That is the thing that I'm most excited about," Stein said, "that idea that we are aligned in terms of what we want for consumers and we can be part of that conversation together."
The technological problem, however, will take a little more time.
"You'd have to custom-build something for Company A and Company B, so how do you partner with a bunch of firms?" Stein said.
"That becomes your entire challenge - is integrating with the technology."
- US buys 81 Soviet-era combat aircraft from Russia's ally costing on average less than $20,000 each, report says
- 2 states where home prices are falling because there are too many houses and not enough buyers
- A couple accidentally shipped their cat in an Amazon return package. It arrived safely 6 days later, hundreds of miles away.
- India Inc marks slowest quarterly revenue growth in January-March 2024: Crisil
- Nothing Phone (2a) India-exclusive Blue Edition launched starting at ₹19,999
- SC refuses to plea seeking postponement of CA exams scheduled in May
- 10 exciting weekend getaways from Delhi within 300 km in 2024
- Foreign tourist arrivals in India will cross pre-pandemic level in 2024
- JNK India IPO allotment date
- JioCinema New Plans
- Realme Narzo 70 Launched
- Apple Let Loose event
- Elon Musk Apology
- RIL cash flows
- Charlie Munger
- Feedbank IPO allotment
- Tata IPO allotment
- Most generous retirement plans
- Broadcom lays off
- Cibil Score vs Cibil Report
- Birla and Bajaj in top Richest
- Nestle Sept 2023 report
- India Equity Market