In this article Banking and Fintech: An Uncommon Partnership, Jim Marous, Co-Publisher of The Financial Brand and Publisher of the Digital Banking Report, presents the results of a recent survey of senior bankers and fintech executives that provides a unique perspective on the strengths and weaknesses of the current players and the impact of potential transformation of the retail banking industry over the next several years. The article also references another report published by the Economist Intelligence Unit titled: ‘The Disruption of Banking.,’ Over 100 senior bankers and 100 fintech executives were interviewed to ascertain the likely landscape for the retail banking industry over the next five years. When bankers were asked how fintech may disrupt the banking industry, more than 90% of bankers believed that fintech firms will have a significant impact on the future landscape of banking, with more than a third believing that fintech will win an equal share (24%) or even dominate the market (20%).
Fintech is here to stay. Banks must partner with innovators in the fintech community if they are to transform and thrive.
This chart was pulled from the deck of the Bank Director’s annual Acquire or Be Acquired conference in Arizona. More than 900 financial executives and board members attended the conference and voted in the poll.
If you examine the graphic, you will see that the majority of banks are interested in moving forward with a fintech company but are not sure what to look for in a fintech partner to succeed.
Here are four things to look for in a partner.
1. Knowledgeable about the industry – This may seem like a no brainer however many tech companies do not have direct experience in financial services. The sales representative may be able to talk the talk but it is important that there be a depth of knowledge throughout the company. They need to understand how banks make decisions and understand their business processes. It is important that there is knowledge in: the product organization (for planning), engineering (for development) and in customer support understand the nuances of the industry. For example, a fintech partner maybe an expert in customer experience however if they don’t understand the customer experience within the context of banking, then it is unlikely that they would understand the challenges of your business and where you need to go in the future,
2. Vision Alignment – Make sure your partner understands your point of view of where the banking industry is headed and how you plan to evolve over the next three years. Listen to your partner’s vision of how they see the industry and how the technology will evolve to support it. Both you and your prospective partner may have very different perspectives but you need to agree on a mutual vision or the partnership won’t work in the long term.
3. Proven Solution – Talk to the potential fintech partner’s customers before you sign. It is easy to select a product but much more difficult to select a partner. You want to hear about their overall experience as well as the success of onboarding, ongoing customer support, and their ability to deliver product enhancements and upgrades in a timely manner. If you hear the phrase “we will figure that out for you as time goes on” run the other way.
4. Collaborative – Your partner should work as an extension of your team and demonstrate a willingness to partner with other fintech organizations if the need arises.
Choosing a fintech partner is a serious commitment. It takes commitment from both parties to make it work. When it works, it is fabulous but when it doesn’t it could severely impact your business.
We are a fintech partner with Regions Bank, Rockland Trust and Suntrust among others. To learn more about how our bank partners achived a 150% account lift at the point-of-sale, click here.