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The debate over competition and cooperation between banks and fintechs has been going on for some time, but the pace of change in the industry has seen companies keep up with new developments and digital products stay relevant and up-to-date. We needed a partnership to ensure that we were. date.
Panel discussion on banking and fintech collaboration held at this year’s FinovateFall
More and more companies are considering working together to tackle the evolving industry landscape. How can companies choose the right partner to increase the likelihood of successful collaboration?
The topic was one of many discussed at the FinovateFall conference in New York this week, with many industry veterans giving their opinions.
During the event’s panel discussion, Moderator and Executive Editor, American Banker Penny Crosman, Technology kicked off the session. It details the risks resulting from the complexity that banking and fintech partnerships can bring to the ecosystem and the need for proper oversight to avoid potential crises.
Josh Williams, CBO and head of partnerships at Seattle Bank, said scrutinizing how companies handle KYC and manage data isn’t new for banks, but regulators have been asking about partnerships. We welcome the clarification of our expectations.
he said: Clarifying expectations more broadly will only help in making sure that all parties have more realistic expectations of what a successful lasting partnership requires. “
Franklin Garriguez, Vice President of External Ecosystems at TD Bank, added: This is nothing new and has been for some time.
The ecosystem is becoming more complex and managing and managing overall risk is becoming more difficult. I think that is the message we are hearing. Hearing expectations and guidance is helpful .
I think the reality is that most banks are looking at it and working on compliance and proper third party oversight. You need to make sure that
Maria Gotch, president and CEO of New York City’s Partnership Fund, added that the comments were “a warning beyond the bow,” although a major bank had been considering it for some time. It reflects that
Regulators are going to put in place a clearer paradigm on how they are going to look at these partnerships, and that will be clear for everyone going forward, she says. .
Everyone in business wants clarity on what they do and dont do. And they seem to be trying to implement that. Ultimately, I think it will only help the sector in terms of enabling more partnerships with better institutions.
The conversation discussed the key elements of a successful partnership and stressed the importance of choosing the right team with Mike Vostrizansky, Growth Equity Investor at FTV Capital.
“If there’s one thing you know about business, it’s that you have to pivot in a certain way along the way. And you have to trust your team and work together in a very functional way.” If you can’t, you can’t be set up for the right type of partnership,” he says.
Garrigues adds that it’s also helpful to look beyond the original product to an ongoing and broader relationship when considering partnerships.
“It’s not just a product. When we partner, we want to co-create and create ways of working together that lead to a suite of products. So it’s important that that culture is with us.”
Culture is next. Can we get along with leadership? Do you feel it? That’s what we see.
Working with banks is difficult. We know it takes time, energy and persistence. So the partners who work with us need stamina and tenacity to work with us. We move at different speeds, so that’s the reality.”
Williams boils it down to three questions to ask before proceeding with any partnership.
One: Is it technically possible? Everything you need to be able to see in .
Two: Is it legal? And three: Can we all make money? There has to be economics to support this. And if during that conversation we find that people are only working out two of those three things, that’s a good partner for us You know it’s not, and you can move on from there.”
Vijay Metha, CIO of Consumer Information Services at Experian, added:
“As long as you get in on the conversation and make sure you’re on the same page about what each other’s goals are and be honest with yourself and with them, I think that’s what really supports a positive partnership. “
