By Anna Irrera, Elizabeth Dilts
NEW YORK (Reuters) - Morgan Stanley is simplifying the way it acquires new technologies from small companies to speed up collaboration and address long running concerns by startups that working with big banks is slow and costly.
The bank has been taking steps to reduce the time it takes to begin working with new vendors by streamlining documentation and broadening 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, helping reduce from three months to as little as one week the time to begin working together, Melamed said. The bank also launched a portal for employees to test new technology, he added.
“We have looked at how to improve over-complicated processes,” Melamed said. “The benefit for us and them is (saving) time and money.”
Large banks have been increasingly working with financial technology startups to launch new digital services, as they seek to keep abreast of technological change and fend off competition from new entrants.
Entrepreneurs have long said, however, one of the biggest challenges they face when selling to large institutions remains their cumbersome procurement process.
As highly regulated entities banks must ensure the technology and services they acquire are reliable and sturdy, a need often resulting in months of meetings and reams of forms. This can be especially challenging for startups with limited resources and few employees.
“I used to be a founder and CEO of a fintech company,” Melamed said. “I’ve experienced the pain from the other side.”
Morgan Stanley’s efforts to shorten on-boarding time come as the bank’s wealth business rolls out WealthDesk, a suite of nearly a dozen new tech tools and services, to 15,000 financial advisers.
WealthDesk is a key part of the growth strategy for the bank’s wealth business, which contributes half of Morgan Stanley’s revenues.
In November, the bank held a fintech event at its New York headquarters 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’s this presumption that big firms are dumb and slow,” Gorman said at Morgan Stanley’s U.S. Financials Conference. “We’ve also got very deep pockets and scale, and we are not dumb.”
Reporting by Elizabeth Dilts and Anna Irrera; Editing by Steve Orlofsky