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Commonwealth Bank (CBA), one of Australia’s largest banks, is looking to tap into the emerging financial technology (FinTech) market across the country through the launch of FinTech startup incubator X15 Ventures. Growth and technical expertise for the new venture comes from KPMG and Microsoft.
X15 Ventures is an ambitious project that aims to get five FinTech businesses up and running this year alone, and 25 businesses up and running over the next five years. CBA has an existing $1 billion annual technology investment fund, part of which will fund X15 ventures. The exact amount allocated to the fund was not disclosed.
The new incubator has gained traction as it has already gotten two startups to join. The first, Home-In, is an online service designed to simplify residential real estate transactions. The second is a free application that generates analytical business statistics for businesses in Australia.
As these firms look to the next phase of growth under the X15 umbrella, Microsoft will support participating firms with technology development, while financial expertise will come from Big Four accounting and consulting firm KPMG.
The move comes amid a rapidly expanding FinTech market across Australia. The country’s big banks are struggling with a number of market factors and are threatened by the emergence of FinTech players, especially in the segment of retail banking and investments. The heavy legacy systems of large banks are a major obstacle to their ambitions to build an agile and flexible operation.
CBA’s move to outsource some of its innovation through X15 ventures reflects a popular trend among major banks, with National Australia Bank (NAB) and Westpac also recently turning to the startup landscape. The former supports an acceleration program, while the latter identifies promising startups in the regulatory technology (RegTech) space through a call set in 2018.
CBA’s Toby Norton-Smith has been appointed CEO of X15 Ventures. Norton-Smith has been with the Commonwealth Bank for more than five years and was previously the bank’s Director of Partnerships and FinTech, as well as Chief Innovation and Entrepreneurship Director.
“X15 allows us to open doors and collaborate with entrepreneurs more easily than ever before. Under its umbrella, we will create the environment for new businesses to flourish, empower Australian innovators and bring to market new solutions designed to empower customers like never before. Businesses will be supported and developed as start-ups, but will have the scale and reach of CBA behind them to achieve rapid growth,” Norton-Smith said.
Amanda Price, Director of High Growth Ventures at KPMG, comments on the partnership with X15 Venturessaid: “We look forward to working with X15 Ventures to build the ecosystem of support these new businesses need. From founder programs designed to unlock sustained high performance to business and strategic solutions for high-growth businesses, they will have a wealth of smart tools at their disposal to help them overcome the challenge of rapid scaling.”
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