The current reality of the financial industry is shining a light on the growing importance of partnerships between traditional banks and fintechs. A recent survey found that most fintechs and banks recognize that consumers will be the ultimate beneficiary of open banking but also know it’s an opportunity for them as well. These mutually beneficial relationships help banks offer services that, on their own, would take years to develop, and they allow fintechs to scale distribution more quickly. However, they are susceptible to a few common stumbling blocks:
With data breaches steadily increasing, companies not only need to ensure the privacy of their customers’ information, they must also build trust by communicating these security efforts with their customers. Data privacy assurance becomes even more important within bank/fintech partnerships, as these can sow uncertainty among customers about how secure the information sharing process is between companies, or if the two even share the same security standards and regulations. And on that note…
Fintechs actually stand to benefit in this arena. Digital finance is already highly regulated, and this throws up issues for many fintech startups trying to go it alone. Fintechs often have the ideas for a great product or service to offer, while traditional banks provide regulatory compliance and familiarity with financial rules and regulations. Before entering into a partnership together, both parties should be clear on the compliance rules and how they will ensure adherence to them.
For partnering banks and fintechs, investment in success means staffing up. One problematic trend within these partnerships is the failure of either party to assign specific, dedicated staff to nurture the partnership. Among institutions that do assign people to work with fintech partners, most appoint one or two employees to the task. Maintenance, development and expansion require an entire team.
Adaptigent Partnership Advantage
Adaptigent empowers partnerships between traditional banks and fintechs by solving the legacy crisis. Our technology facilitates easy access for fintech applications to unlock the full potential of data trapped in banks’ legacy systems. What used to take months or even years can be done in days or weeks, keeping up with the relentless pace of innovation. Using our no-code, drag-and-drop environment, even non-programmers can rapidly develop sophisticated interfaces with complex legacy platforms without in-depth technical knowledge of the applications and data sources they are accessing.
Remove Barrier to Collaboration
See how our Adaptive Integration Fabric enables technology leaders to amass their core systems’ data bank and effortlessly migrate the crux of their business into the modern digital ecosystem, facilitating easy partnering without sacrificing information security.