4 Tips for Establishing Successful Bank-Fintech Partnerships

4 Tips for Establishing Successful Bank-Fintech Partnerships

williamsjulia673
2 November 2022

The fintech industry arms reach into every aspect of commerce, making financial transactions easier for consumers and sellers.

Fintech firms give customers more choices in all their financial decisions, from borrowing money online to securely making payments through various methods. In short, customers don’t need to rely on banks anymore.

This reality is becoming more obvious daily as more fintech startups hit the scene. Banks understand that their choice comes down to allowing these firms to steal their customers or partner with them and reduce the potential threat.

Yet, successful bank-fintech partnerships find opportunities on both sides. Banks connect with a fintech firm, which then helps them increase their efficiency, productivity, and consumer service.

If you’re considering partnering with a fintech banking company, these four tips will guide you into a prosperous relationship.

  1. Look for a Niche Solution

There’s no shortage of startups when you’re a bank in the market for a fintech company. Those that stay relevant are businesses that offer innovative products or services in the banking industry.

Look for fintech startups that fill a market need that your bank doesn’t currently service. If you can gain a competitive advantage by partnering with a company with a unique product, that’s even better.

Some common gaps in the traditional banking world include digital payments, peer-to-peer lending programs, and virtual credit cards. 

These areas lack the security protocols of the “normal” bank processes and can be too expensive and time-consuming to make it worthwhile for the bank on its own. Partnering with a fintech company takes away the risks inherent in these services while increasing consumer satisfaction.

  1. Be Clear and Upfront About Your Goals

For any partnership to be successful, both parties must be on the same page. This is especially true when you’re dealing with massive sums of money, as you do in banking.

You’re looking for a fintech company to fill a need you and your customers have. When you’re not clear and honest about your hopes and goals, the fintech company you work with isn’t able to direct you as accurately as it should.

Before you partner with a fintech, research your current practices and determine where there are opportunities for improvement. Present those challenges to the fintech companies you’re considering working with, and ask them how they can fill those needs.

Be cognizant of where you’re assuming the response. The companies may have more services available than you realize.

  1. Bring in Someone Comfortable With Fintech On Your Side

If you’ve seen fintech as a threat up until now, it’s understandable that you’re nervous about bringing one on board in your bank. 

The initial threads that connect this partnership are tenuous but crucial. Who you choose to represent your bank with the fintech company should be someone comfortable with this side of finance.

When you have someone on your side acting as an advocate for this new step in your bank’s future, the partnership becomes more efficient instantly. This person knows more than the basics and can allocate time and resources to the factors necessary for upcoming growth.

Use this dedicated representative to educate the fintech company about the bank’s needs and the bank’s staff about the necessary changes coming. Because this person is already comfortable in their position and an advocate of fintech, they’ll simplify the transition for everyone.

  1. Listen To and Watch For Feedback

You’ll work with the fintech company to set short- and long-term goals and the action steps necessary to reach them. However, to ensure they work, there must be a way to measure those steps. That’s where big data comes into play.

You’ll print reports that tell you the numbers and statistics. Yet, one crucial part of feedback will come from the employees and customers. The overall digital experience lends itself to a more hands-off approach, making it harder to judge consumer satisfaction unless you look for it or are receiving regular complaints.

How will you request and observe feedback? Listening to staff and customers goes a long way toward ensuring their loyalty.

In a world where banks are now a dime a dozen, high customer satisfaction, and low employee turnover rates are vital to your bank-fintech partnership.

Conclusion

Fintech companies and banks aren’t mutually exclusive. Banks can take advantage of the benefits of the fintech sector to enhance the opportunities they provide customers.

With these four tips, your bank-fintech partnership can be an exceptional change to the traditional, outdated model of finance.

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