Bank accelerator programmes find their footing as business development partners

ACCELERATOR programmes at Singapore's 3 banks have evolved beyond recognition since the first was launched 7 years ago. The directions taken could be helpful for instruction as more financial institutions roll out similar initiatives.

When UOB launched The FinLab in 2015, accelerator programmes were mushrooming across the country.

The bank had stuck closely to the existing script, offering a selection of startups funding, workspace, mentorship and some access to its network and infrastructure.

Rival OCBC followed shortly after with its own startup incubators in 2016, taking roughly the same form.

These days, however, both their accelerator programmes are more likely to be business development avenues – helping solve business problems or find new sources of revenue.

OCBC's accelerator, The Open Vault, has been transformed into an engagement programme for ecosystems as well as the bank at large. The Open Vault no longer runs 3-month programmes culminating in a demo day for startups to attract investors.

“Today, given the fast-evolving nature of financial technology, the engagement model has broadened from startups to include ecosystems as well,” said Peter Koh, head of group technology architecture at OCBC.

OCBC has also built a platform to support initiatives with dedicated resources and sandboxes. “As part of the programmes, short sprints are organised with our partners, with durations from as short as 2 weeks, to design solutions and to assess potential use cases quickly. Since 2018, about 180 of such sprints have been held,” said Koh.

UOB, meanwhile, has pivoted its accelerator The FinLab from startups to digitalising small and medium-sized enterprises (SME) since 2018.

The bank sees this effort as a way to reach out to SMEs, befitting its image as an SME-centric bank. Operationally, The FinLab is parked under the channel’s side of the business and reaches out to new and existing customers.

Since the pivot in 2018, UOB says it has helped over 6,000 SMEs across Singapore, Malaysia and Thailand.

“We feel that there was a need to support SMEs in that way, so we adopted the fintech accelerator model and broke it down for SMEs. It was also timely that there was a big movement in Singapore to help SMEs go digital at the same time,” said Shannon Lung, head of The FinLab.

In DBS’ case, its accelerator Startup Xchange was launched relatively late – in 2018 – and was problem-focused from the start. Startups create solutions to DBS’ problem statements together. Rather than having cohorts or cycles, the bank runs it on a rolling basis.

“To date, we have introduced and assessed over 500 startups from which we have conducted about 60 proof of concepts (POC), and from there, over 20 have been deployed to production,” said Bidyut Dumra, group head of innovation, DBS.

DBS has also taken its startup engagement a step further, with a programme called "DBS Startup Unleashed". This is a 2-year programme for high-growth companies and includes free services, networking opportunities and preferential fees.

The evolution of their startup programmes reflects, perhaps, a deeper appreciation of the different ways in which startups fit into the banking ecosystem. Some startups may be able to present solutions for the bank, while others are current or future revenue generators.

Dumra sees DBS able to play a role in supplying financial expertise to startups.

“From my experience working with these companies as a mentor, they are typically expert in tech but require expertise in (the fin portion of fintech). DBS has played a key role connecting the 2, not only by providing subject matter experts, but also by delivering banking services that enable startups to connect their products to clearing infrastructures,” said Dumra.

Both UOB and DBS have also recently launched their versions of sustainable or green technology accelerators.

DBS launched SustainTech Xcelerator in December 2020 with partners Google Cloud, Temasek, the World Bank and Centre for Nature-based Climate Solutions at the National University of Singapore. The programme is a 6-month global virtual accelerator targeted at increasing confidence in carbon credits from nature-based solutions, solutions that involve protecting and better managing natural ecosystems.

“The 5 startups from Cycle 1 of the 2021 SustainTech Xcelerator have made significant progress since their graduation. For example, they have raised significant amount of capital to grow their businesses, formed meaningful and scalable partnerships and have increased aspirations to grow their businesses and expand their teams,” said Dumra.

UOB has launched 2 separate programmes: a Sustainability Innovation Programme in 2021 to match up SMEs with green solutions, and a Greentech Accelerator. The Greentech Accelerator is a 3-month programme for regional and global green tech startups, with the focus for 2022 on energy efficiency, carbon management and reporting, and zero waste supply chain. Applications for the 2022 cohort close on Jul 10.

“The Greentech Accelerator kind of goes back into the first iteration of The FinLab, but this time round we’re just focusing on green tech,” said UOB’s Lung.