Bank-fintech fusion

Banks and fintechs are not competitors. In actuality, they share more things than not. While it is undeniably true that traditional banking has been disrupted by the quick digitization of financial services, a strong alliance between banks and fintechs is emerging as the banking industry’s wave of the future. Almost half of banks have partnered with a fintech start-up in the previous three years, and this number is only rising. Fintech alliances will be critical or very important to driving corporate strategy over the next three years, according to 91% of banks surveyed by EY.

Establishing a collaboration is just the beginning. A successful and long-lasting partnership will require careful planning from both organisations, including strong organisational alignment, a thorough comprehension of key objectives, well-defined go-to-market strategies, and a shared dedication to expansion. These three essential elements are present in every prosperous bank-fintech collaborations.

Corporate Orientation

Above all, a partnership ought to be mutually beneficial. Initially, there should be similarities between the company cultures, business philosophies, and work methods of banks and fintechs. When organisations have a strong ideological foundation based on cohesion and unity from the outset, all other aims are set up for success.

In order to establish a successful and mutually beneficial cooperation, the fintech and bank need also have complementary experiences and skill sets. Fintechs should collaborate with banks that can guide them through compliance gaps, which are a blind spot for a lot of new businesses. This would entail looking for alliances with banks that already have a good rapport with regulators as well as fraud and compliance product partners who have worked with fintechs to assist them comply with legal standards. Fintechs, on the other hand, are the means by which the banking industry can modernise and provide the digital experience that consumers desire. Banks ought to seek partnerships with fintech firms that possess a strong client acquisition platform and a well-defined marketing approach. Selecting a partner that offers complementary services would enable the collaboration to establish a strong digital financial services platform and generate a competitive edge.

To guarantee a seamless and quick integration, both companies should collaborate directly with one another via an embedded banking software platform. The best way to comprehend one another’s needs, harmonise company models, and promptly resolve issues is through direct contact.

A Specific Plan

We like to say at Grasshopper, “Fail fast and fix it.” The goal is to launch a product fast, gauge consumer reaction, and make necessary modifications to satisfy demands. This approach offers a quicker route to success than continuously refining a product while it is still in development. Since pursuing perfection takes time, we would rather stay flexible, minimise delays, and be prepared for obstacles. Banks and fintechs will frequently have greater success with a pared-down product launch and further development after it hits the market.

Achieving a balance between product quality and speed to market is crucial. Regarding the timing and execution of product launches, banks and fintechs ought to coordinate. Complete openness throughout the product lifetime and a basic comprehension of the standard procedure, including required resources, stakeholders, schedule, and expectations, are essential. A product launch fundamentally requires a core plan for client uptake, which will be facilitated by a quick time to market.

The plan must be established early on in the collaboration between banks and fintechs. A successful partnership depends on the implementation of a defined product strategy, which is the crucial element of corporate alignment that guarantees synergy between the two organisations.

Make a Long-Term Plan

Partnerships between banks and fintech are long-term projects. If properly managed, this is a long-term partnership that could last for many years. To uphold best practises and create creative solutions that satisfy market need, both parties must have constant, effective communication throughout the partnership. This will create a solid and long-lasting alliance.

After a product launch, partners ought to gather input from customers and work together to create a joint solution that addresses issues and broadens the range of products available. While internal resources should be available to both the bank and the fintech, the process should be managed collaboratively and side by side. This will probably call for constant, clear communication in order to sustain a solid working relationship long after the final user has your goods in their hands.

In the end, a product launch is just one aspect of the collaboration between fintech and banks. In order to satisfy client needs and stay on top of technology advancements, the partnership should be able to grow its product offerings and introduce new ones as needed.

A successful bank-fintech cooperation requires alignment and transparency. With so many fintechs available to banks, choosing the appropriate alliance might mean the difference between staying ahead of the curve and struggling in the digital banking space.