FinTechs have been created to transform the banking industry. Digital-centric, they started with a small niche — payment offerings, they then quickly moved onto the backend of financial services, providing a multitude of new solutions.
Throughout the years, some have moved from being a standalone proposition to partner with incumbents. Although not all partnerships have been successful, there seems to be an appetite from both sides for continued partnerships and engagement.
The Economist points out that in order to survive the current pandemic crisis, smaller FinTechs will have to merge between themselves. Stronger, mid-size companies can survive a crisis better than small companies. The fact is that against all expectations new propositions have continued to be launched to the market amid the crisis.
It remains to be seen what the future form of new digital propositions will be. From current discussions and industry sentiment, one would bet that a combination of partnerships and standalone solutions will continue to surface:
- FinTech only propositions
- Incumbents only propositions
Continued standalone propositions from both FinTechs and incumbents will ensure competition in the market with new ways of banking and solutions launched.
- Partnerships between FinTechs
- Partnerships between incumbents and FinTechs
As more partnerships take place, incumbents and FinTechs will continue to learn to work together ensuring clear communication from the start. It is essential that both parties understand the culture differences and agree combined KPIs for success. Additionally, a few housekeeping points will support both sides to start with the right foot in the journey:
- Ensure there is a clear leadership mandate and availability
- Ensure the operating model is in place to speed up experiments, e.g. Sandbox environments, clear onboarding process
- Document the problem to be solved and to be shared with the relevant partner
- Ensure data is ready and business SMEs are engaged
- Ensure all information and documents needed for onboarding are readily available
- Understand the problem to be solved from the partner perspective (and be bold, advise if your technology is not the right one)
- Ensure the team can translate the technology jargon into business impact
- Agree timelines and milestones with the partner
As mentioned by Christian Hull during FinTECHTalents Virtual / Spring, that I was involved in, “a good partnership is the one that brings value to the customer”.
This is a personal blog. Any views or opinions represented in this blog are personal and belong solely to the blog owner and do not represent those of people, institutions or organisations that the owner may or may not be associated with in professional or personal capacity, unless explicitly stated
Rita Martins, Digital Transformation Manager, HSBC took part in the Lunchtime Innovation debate at FinTECHTalents Virtual / Spring. Register for FinTECHTalents Virtual North America now.