Fintech and Banks — collaboration is key!
Numerous FinTechs have lined up to disrupt banks. However, will they be successful? Will FinTechs really compete with banks? Or will they close the gap between “dusty” service offerings of incumbent banks and customer needs and in the end rely on bank infrastructures rather than eliminating them? Can FinTechs and Banks cooperate at all?
Experience from partnerships with several FinTechs has shown that for FinTechs to succeed, it might be worthwhile thinking twice whether to disrupt or to collaborate. FinTechs can profit in numerous ways from banking partners, be it that the FinTech can refer the banks’ existing infrastructures as well as industry and regulatory experiences it they might not have or underestimate. Banks, on the other hand, need to make a choice whether to work with FinTechs, leave it up to others and innovative solely by themselves. FinTechs rethink customer needs and very often create valuable additions to banks’ product and service portfolios.
The article will demonstrate FinTechs and Banks can fit. It aims to give advice to both FinTechs and Banks for successful cooperations.
FinTechs need to find out whether collaborating makes sense, how to prepare for a partnership and make the right partner choice. During the cooperation, it is important to understand what support FinTechs can expect from their partners and how both can efficiently work together without creating frustration on both sides. FinTechs, however also need to respect the framework banks operate in.
Also on the banking side, initial strategic decisions need to be made. Cooperations need to make sense, both strategically and economically. What are decision factors for a partnership from the banking side? Mindsets in startups are fundamentally different than in traditional banks — what can banks expect, what do they have to cope with?
Editors Notes: This entry has been submitted to the FINTECH Book, the world’s 1st globally crowd-sourced book on FINTECH. Readers that enjoyed this initial abstract are invited to share and like it so that it may be featured in a longer version that will published in the FINTECH Book due to be released November 2015.