NEW YORK (Reuters) – Morgan Stanley is simplifying the way of obtaining new technologies from small companies to speed up cooperation and address long-term problems by startups that work with large banks is slow and expensive.
A sign is shown on the Morgan Stanley building in New York city, USA, July 16, 2018. REUTERS/Lucas Jackson
The bank is taking steps to reduce the time it takes to start working with new suppliers by streamlining the documentation and the broadening of the opportunities for executives to evaluate new tech products, Shawn Melamed, Morgan Stanley’s head of technology, business development and innovation office, said in an interview this week.
Earlier this year, the bank trimmed a 20-page vendor agreement to one page, to help reduce from three months to as little as a week the time to begin to work together, Melamed said. The bank also launched a portal for employees to test new technology, he added.
“We have looked to improve the complexity of the processes,” Melamed said. “The advantage for us and for them, (save) time and money.”
Large banks are increasingly working with financial technology startups to launch new digital services, as they try to keep abreast of technological developments and the fend of competition from new entrants.
Entrepreneurs have long said, however, one of the biggest challenges when selling to large institutions is their cumbersome procurement process.
As highly regulated entities, banks should ensure that the technology and the services that they acquire are reliable and robust, a need which often results in months of meetings and stacks of forms. This can be especially difficult for start-ups with limited resources and few employees.
“In the past, I was one of the founders and CEO of a fintech company,” Melamed said. “I have experienced the pain of the other side.”
Morgan Stanley’s efforts to shorten on-boarding time will come when the bank treasure business rolls WealthDesk, a suite of nearly a dozen new tech tools and services to 15,000 financial advisors.
WealthDesk is an important part of the growth strategy for the bank’s wealth business, which contributes half of Morgan Stanley’s revenue.
In November the bank had a fintech event at the headquarters in New York, where 400 Morgan Stanley executives met with 90 fintech startups, Melamed said.
Morgan Stanley Chief Executive James Gorman has been vocal about the bank’s technology aspirations, and in June pushed back against the perception that Wall Street is too bureaucratic to work with Silicon Valley.
“There is a presumption that large companies are stupid and slow,” Gorman said at Morgan Stanley U.S. Financials Conference. “We also have very deep pockets and scale, and we are not stupid.”
Reporting by Elizabeth Dilts and Anna Irrera; Editing by Steve Orlofsky