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Last month, ex-Barclay’s CEO Antony Jenkins warned that banks face massive disruption within the very near future. Similar to how the popular ride-sharing app Uber is upsetting the balance within the transport industry, so too does the financial services sector face inevitable disruption. Technologies such as cryptocurrencies, blockchains and mobile are opening up cheaper, faster and more secure avenues for services.
In order to stay ahead of the curve, Barclays has officially launched the African arm of its global innovation network called Rise. Located in Cape Town, South Africa at the The Bandwidth Barn, the hub is also partnering with the renowned global accelerator, Techstars.
The Cape Innovation and Technology Initiative (CiTi), the entity to which The Bandwidth Barn belongs, aims to foster open innovation and digital collaboration through its Virtual Innovation Clusters.
“This collaboration with Barclays Rise follows on from a very successful partnership with Telkom which runs its FutureMakers programme in partnership with the Barn,” CiTi CEO Ian Merrington explained.
Rise has over 20 000 startups in its network around the world, with established hubs in London, Manchester, New York and now Cape Town. The programme is also opening up new offices in India, Tel Aviv, and Vilnius in Lithuania. With its entry into Africa, the multinational banking giant seeks to further create a community for startups, corporates and innovators, helping them connect, co-create and scale the ideas that could become the next revolutions in financial services.
“We’re seeing really intense disruption,” explained Ashley Veasey Chief Digital Officer for Barclays Africa, the architect of Rise in Cape Town. While many companies are frightened and reserved about this imminent disruption, Barclays is said to embrace this challenge.
“We’re embracing this by creating an open innovation ecosystem with great young minds and expertise. We want to tie that with Barclays in Africa where we’ve been around for over 150 years,” he told Ventureburn.
While the red ribbon for Rise Africa was officially cut on Thursday, Barclays has already given us a taste of what to expect in the coming years. Its Tech Lab Africa programme, for example, has been running since September and accelerated 10 startups from around the continent involved in medical and financial tech. We also saw the Africa Supply Chain Challenge competition in November.
Of those accelerated in the Tech Lab Africa programme, Barclays Africa has already signed contracts with innovative identity authentication platform Consent, payment solution startup Peach Payments and Invoice Exchange. The bank is “in talks” with the other seven cohorts for potential collaboration in the future.
“If we can help young entrepreneurs to come to market with their ideas, that’s great for our customers, the community, and that’s great for the bank too,” added Craig Bond, Chief Executive of Retail and Business Bank for Barclays Africa.
For 2016, Barclays Africa partnered with the renowned global accelerator programme Techstars, which boasts 1 000 mentors across 12 locations across the globe. The three-month intensive programme offers access to data and tech, mentorship, rounding off with a demo day.
Alan Winde, the Provincial Minister of Economic Opportunities, said that initiative’s like Rise are crucial for the local economy going forward.
“It’s the new economy,” he told Ventureburn. “It’s about trade. It’s about services. Those services can be delivered to anywhere in the world. Fintech can be sold anywhere in the world. And that’s where our economy needs to be.”
For this to happen, though, the private sector, academia and government need to collaborate and be more receptive towards innovation. “You’ve got to create the perfect storm, get the right minds in the room,” he said.
Ian Merrington added that 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 aging industries like banking. “[CiTi is] 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.”
Echoing the warnings of Anthony Jenkins, Stephen van Coller, Chief Corporate Investment Officer of Barclays Africa, explained that banks today are looking at ways to “kill the legacy, while building a new one”.
“If you look at banks, they have traditionally been built on systems over the last 40 years,” explained van Coller. “They’ve got very expensive IT infrastructure. Suddenly, new entrants can do this a lot faster and a lot cheaper and more secure. Unless we understand what they’re doing, we’ll start finding, not only our breakfast, but our lunch and dinner being eaten away.”
Applications for the Barclays Accelerator, powered by Techstars, close 17 January 2016.