HSBC is preparing to invest up to $200 million (£119m) in financial tech start-ups with the aim of improving its own technology systems, according to reports.
The fund is earmarked for investment in start-up firms which provide technologies focusing on both retail and wholesale banking markets, according to anonymous sources cited by Financial News. The UK bank’s investment will target start-ups operating globally, it is said.
HSBC was unable to provide comment on the reports.
A number of banks are taking an interest in the start-up space. For example, Barclays launched its own accelerator programme this year to offer financial tech start-ups up to £12,500 seed funding in exchange for equity.
Speaking to ComputerworldUK at the Accenture-backed Fintech Innovation Lab last year, Citi EMEA CIO Alistair Grant said that banks can benefit from the speed and agility of innovative start-ups.
Meanwhile, financial institutions are being forced to compete with tech companies to attract top tech talent. US bank JP Morgan, recently announced that it would invest £28 million in improving its Bournemouth premises to offer facilities that compete with the likes of Google and Facebook.
Many large banks are attempting to deal with legacy estates that make delivering innovative products more challenging. UK regulators have in the labelled many of these systems ‘antiquated’, and a review is currently being conducted by the Prudential Regulation Authority.