In This Article
- 8 Ways To Foster Sustainable Relationships Between Banks and Fintech
- Identifying the gap
- Ensure transparency
- Find win-win solutions
- Positive results
- Find the progressive banks and work with them
- Position your bank for long-term success with fintechs
- Be flexible and demonstrate maturity
- Fintechs need to play their part, too
The relationship between banks and fintechs has not been straightforward. For years, banks have attempted to resist the hassles of implementing fintechs, and fintechs have rarely made it easier for banks. But things have started to change of late.
Banks have slowly warmed up to the idea despite the hassles attached to operating and implementing fintechs. Banks recognize the role fintechs can play to change the spectrum of banking in the US and take it to a whole new level. As organizations around the US start drafting policies and procedures for implementing fintechs, your failure to adopt these technologies could mean a massive disadvantage in the long run.
And while early adopters have their share of troubles, they will also be the first to receive benefits. Now is the right time to create a sustainable relationship between banks and financial technologies.
8 Ways To Foster Sustainable Relationships Between Banks and Fintech
Identifying the gap
The equation is simple. As we move forward, there will be gaps in banking operations that need to be fulfilled for long-run efficiency. This is where financial technologies come in. Fintech far outperforms a single bank, whether commercial or consumer. The trick is to identify the gaps in your banking operations and align them with financial technologies. The gaps will help you understand how fintechs can fit into your operations without creating too many hassles for employees or customers.
Transparency comes first when establishing long-term relationships, which is not limited to within the organization. Transparency is crucial for establishing a quality and sustainable relationships across all levels, including vendors, clients, and consultants. This means sharing information on what each side can bring to the table.
Find win-win solutions
As organizations, you should always look for win-win solutions. This will help you foster sustainable relationships with your fintech partners and increase the overall efficiency of banking operations. Whether it’s about giving employees access to financial tools without disrupting their work or spending more on technological advancements to improve customer experience, there needs to be a mutual understanding among all stakeholders involved to ensure success and sustainability.
For both banks and fintechs to excel, they need to create an environment for cooperation instead of competition. For instance, banks can offer personalized services at scale using fintech technologies while maintaining compliance standards across different channels thanks to technology integrations. On the other hand, financial technologies can help banks cut costs by increasing productivity and reducing dependency on human resources.
Find the progressive banks and work with them
Progressive banks aren’t worried about fintechs. They take the fundamental strengths of fintechs and devise methods to keep customer interactions without developing one-off solutions that may or may not solve problems. Fintech solutions provide operational advantages, but they need to be used properly. You will have to acknowledge that someone will be better than you at adopting financial technology as an organization. And instead of competing with rival banks, the goal should be befriending the progressive banks and learning from their strategies while avoiding their downfalls.
Position your bank for long-term success with fintechs
Banks and financial technologies need to collaborate for long-term success. The future is not about competing but prioritizing relationships among stakeholders. And the faster you do it, the better. Moving now will help both parties establish sustainable partnerships to ensure efficiency without disrupting workflows across different departments.
Be flexible and demonstrate maturity
Banks are known for having a strong set of conservative principles. Fintech firms must realize that banks can’t “mess around” with the money they handle since this would be a severe breach of trust. Banks are extremely security conscious, and financial compliance is essential, so partnerships must adhere to the same regulatory standards. Any fintech that wants to operate with a bank must show that its procedures are mature and committed to regulations to qualify for its business.
Fintechs need to play their part, too
While banks are consolidating on fintech partnerships, they also need to remember that not all companies offer solutions that meet regulatory standards. Therefore they need to exercise due diligence before integrating with third-party technologies or services. This will help mitigate risks and secure bank operations in the long run.
The future of banking lies in open collaboration between banks and financial technology firms, especially since they share a common goal: customer satisfaction. Banks rely on customers to generate revenue, and financial technology firms need banks as a core market for growth. Therefore, each party needs to understand the other’s business model before finding ways to cooperate.