LONDON — IBM now has more than 60 startups in its Catalogue offerings that allow for modular inclusion of additional software products.

Tom Eck, Global Chief Technology Officer of Industry Platforms at IBM, told Bank Innovation that the number of startups in Catalogue is a result of significant effort on the part of the technology company to provide its clients with startups’ solutions that pass the IBM “sniff test.” Among the fintech startups on Catalogue are Dwolla, Difitek and Hydrogen.

The “sniff test” that IBM has been undertaking includes looking at operational matters at the startups, including uptimes and capital structure. The effort is noteworthy because a legacy technology company is attempting to create an IT bridge between fintech startups and large financial institutions.

“Our clients want us to,” Eck said at Sibos 2019. “The question is how strong of a statement do we want to make” about the quality or viability of startups.

Ideally, the services provided in Catalogue would be “line items” on the bills of IBM’s clients, making it much easier for the clients – many of which are massive Top 10 financial institutions – to work with fintechs. However, Eck acknowledged that this has not been happening in notable quantity for IBM to realize “end-to-end benefit.”

Still, IBM is working toward achieving “modularity,” which Eck explained as allowing plug-and-play integrations of various fintech products and services. It is a goal he said he is not giving up easily, even though IBM clients want guarantees on such SLA factors at fintechs like uptime – something IBM cannot do, as of now.

One step toward that might be IBM’s Red Hat acquisition this summer for $34 billion. Red Hat allows for the management of a multi-cloud strategy. There is modularity in that – and while this mainly benefits the financial institutions, it is a first step for IBM, he said.