BMO’s approach to embracing startups

Why the bank expanded its partnership with Ryerson's DMZ to launch a fintech accelerator.

BMO has expanded its relationship with Ryerson University’s DMZ incubator to establish the DMZ-BMO Fintech Accelerator as part of its ongoing efforts to support emerging companies in the financial services space.

The accelerator builds on the relationship BMO established with the DMZ last year as part of the Next Big Idea in FinTech program, and will operate in a very similar way. Six entrepreneurs will take part in a four-month incubation period, culminating in an event where they will be able to pitch their product to judges from BMO. The changes in the new accelerator include the addition of industry experts from outside BMO to the judging panel, as well as an increased investment in the more well-received parts of the program, such as networking events, introductions to investors and fundraising experts, and mentorship from leaders within BMO.

“The feedback we got from all the companies we worked with last year was that the mentorship was incredibly helpful,” says Andrew Irvine, head of business banking and partnerships at BMO. “In some cases, they pivoted their businesses significantly. So I think that’s a point we wanted to highlight, because it’s one the companies we worked with last year really did as well.”

BMO has previous experience working with incubators and accelerators as part of its broader innovation plan, having run “collision days” that bring enterprise together with startups to explore possible collaborations at Communitech in Waterloo. It also works closely with BMO Harris Bank in Chicago in its partnership on a similar program with incubator 1871. Irvine says one thing that attracted BMO to the DMZ last year – and what led them to build upon the relationship now – was the fact that it spiked in fintech, capitalizing in the number of entrepreneurs looking to provide services to Toronto’s strength in the financial services industry. One of the companies it worked with last year, FormHero, is currently live on BMO’s website, providing its automated online forms for new card origination, and is a success it hopes to repeat with the accelerator.

Irving cites a number of common reasons when it asked about, like plugging the bank in to new streams of ideas and nimble thinking, saying that combining that with BMO’s regulatory know-how, customer base and consumer trust is a “powerful combination” for both parties involved. But beyond that, he says working with potential disruptors, instead of against them, is part of where the sector is going when it comes to banks embracing innovation.

“The narrative before was one of disruption,” Irvine says. “The question was when would the Uber moment happen for financial services. What has evolved is that there haven’t been that many successful companies that sell to consumers. Money and private equity and venture capital has gone to fintechs that are selling B2B to companies like ours to then have us deploy that to our own customers. That’s been a significant shift, and the role we play is working with those companies to provide what they need for success.”