Finovate Fall 2016. Finovate The common narrative when it comes to financial technology startups is that they pose an existential threat to established players.

They're gaining customers at a pace and have been making a lot of noise.

According to UBS Evidence Lab, the use of financial services from nonbank providers is set to surge by as much as 150% over the next year. A recent PricewaterhouseCoopers global fintech survey found that 60% of asset and wealth managers fear losing part of their business to fintech companies.

And the venture capital firm Anthemis expects some of the financial industry's incumbents to disappear and be replaced by modern-day startups.

But after listening to 82 startup pitches at two of the most prominent fintech events in New York, it's clear the startups are telling a different story.

At Finovate Fall 2016 earlier this month, 1,600 people gathered over two days in midtown Manhattan to discuss the future of finance. It was the 10th anniversary of the conference, and this was its biggest event to date, eight times as large as the first Finovate conference, in 2007.

Seventy-two startups demoed their products at Finovate, in real time, to an audience of investors, bankers, payment companies, and potential customers. After listening to almost nine hours of bright-eyed startup founders talk about the future of the finance, it struck me that they all had one thing in common.

These startups weren't trying to take the place of established players; they were looking to sell to them.

Almost all of the startups that presented were looking to sell their technology to existing players in the industry to add their programming expertise to the vast networks that banks already have.

A MapD visual of taxi drop-offs in Manhattan at a particular point in time. MapD Examples include MapD, a startup that produces immersive visual analytics from huge datasets in milliseconds. The startup already sells to hedge funds, insurance companies, and asset managers, who use the data to analyze things like taxi drop-offs, political donations, flight paths, and tweets to predict stock prices.

A few of the startups like Daon and Trulioo were focused on biometrics authentication and identity verification. They want to integrate their face-, voice-, and fingerprint-recognition methods into existing banking apps.

Others like Personetics and Moven advise on customer spending. They want to integrate with banking apps to help them manage customer relationships by providing spending advice and methods to keep track of customers' money.

Finfit uses behavioral analytics to help users prioritize their digital spending, and it is currently being piloted with four top-tier banks in New Zealand, Russia, the UK, and Spain. Strands uses data analytics and machine learning to deliver digital money-management software to banks, and currently works with Barclays, BBVA, and Deutsche Bank among others.

Ebankit provides digital banking solutions that allow clients to bank using their favorite channels — whether it's Facebook, mobile, a smartwatch, or voice. It currently works with 40 banks in 20 countries around the world. And Clinc, one of the startups that won "Best in Show" at Finovate, wants to partner with banks so customers can access Finie, their financial genie that it says can understand natural language and speak to customers like a person.

"Financial institutions can't do this on their own," said Jason Mars, founder of Clinc. "They're not tech companies. But that's why we're here."

I saw a similar trend at Techstars' Barclays Accelerator. Considered one of the most prominent accelerators in the world, it had its 2016 demo day last Thursday.

Techstars is one of the hardest to get into of all of the fintech accelerators — about 1.25% of applicants who apply get in. After 13 weeks of mentorship and training in the accelerator's Flatiron hub in New York, the 10 startups pitched to a ballroom of over 600 banks and investors.

Techstars' Barclays Accelerator class of 2016. Techstars And like Finovate, it struck me that most of these startups were also hoping to partner with banks — to provide enhanced services that traditional players couldn't offer on their own.

A company like Alpha Exchange serves as a kind of research network for participants in the capital markets, and it is already working with the likes of Barclays and BNP Paribas.

Others were focused on different facets of the financial-services industry that banks could benefit from, like cybersecurity solutions; trading platforms; and a new, streamlined, faster way to utilize Excel.

It's true that not all of the startups that pitched were complementary. A few, like the digital mortgage platform Morty, are challenging the way things are done but would benefit hugely from the scale that traditional players could provide.

"Not embracing disruptive technologies will be the downfall of a corporate [institution]," said Jenny Fielding, managing director of Techstars. "The financial sector does not want to end up like the music business. The moat is only so deep."

Banks and startups can leverage each other's strengths and make up for each other's shortfalls. Banks have large and loyal customer bases, large distribution networks, and the capital to fund new projects. Startups, on the other hand, are innovative and nimble, with deep technical expertise, and they can offer a better customer experience at lower operating costs. They also face huge customer-acquisition costs and challenging regulatory hurdles.

This graph from Antoinette Schoar, a professor at the MIT Sloan School of Management, shows that the trend is going from competitive to collaborative, and she said she only expects this to strengthen over time.

Blackrock, for example, acquired the fintech startup FutureAdvisor, while Northwestern Mutual acquired LearnVest and UBS partnered with SigFig.

Others like On Deck Capital started with a mission to replace the banks with their own brand of small-business lending, but soon changed their tune and partnered with a traditional player like Chase to gain access to a broader market.

And some institutions like Charles Schwab, Vanguard, and Fidelity — have built their own in-house online wealth-management services.

Whether fintech plans to disrupt or enhance traditional models, it's clear that the fintech revolution is very real and that big players need to pay attention or risk getting left behind.

"The way I see corporate venture, in general, is that they are looking to invest in startups with enabling technology or disruptive business models," Fielding said. "Enabling technologies are critical for the evolution of the corporate."