Silicon Valley Bank, First Data seek fintech niches through their accelerator

"Competitions are definitely one way to spot not just innovation but also talent," said Gareth Lodge, a senior analyst at Celent. "But as with all of these things, how they are designed and run has a major impact on their effectiveness."

There are two things to think about, Lodge said. The first is to take value from the process, not just the output.

"For example, the approach to the problem might be innovative or different, and whilst it may not yield a result there, it might when applied to a different problem," he said.

Second, a well-framed challenge is more important than the wow factor, Lodge said. "Following the first rule, it might highlight where innovations could be made."

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