There is a crucial need for widespread Fintech adoption. Payments have increasingly gone digital in recent years in order to address the burgeoning need for a seamless customer experience.
Fintech companies have taken advantage of the strong banking and payments infrastructure in India to introduce a plethora of innovative products and services.
Banks have increasingly adopted these new age solutions offered by Fintech players to enhance their customer engagement and customer service initiatives.
Factors that Affect the Success of Bank-Fintech Partnerships
Strategic partnerships with banks could reduce time-to-market for new solutions on existing bank networks.
- Product lifecycles
Joint development between banks and Fintech companies can have a far-reaching impact on existing financial products.
Fintech players need to work in close collaboration with the banks to ensure adherence to regulatory limitations within which banks are constrained to operate.
Banks need to be extremely cautious and selective in choosing Fintech partners.
- Align products with customer needs
Banks and Fintech players must align product capabilities with the objective of improving customer experience.
Benefits of Partnerships Between Banks and Fintech Companies
Banks can benefit from strategic Fintech partnerships by gaining privileged access to innovative technology, that they might not have otherwise discovered.
Banks can use Fintech platforms to experiment with new, next-generation business models.
In today’s rapidly changing banking sector collaboration of Fintech companies is the key to survival.
Customers are increasingly accustomed to fast, personalised, safe and always accessible solutions and this even applies to banking.
In an attempt to modernise and overcome challenges posed by completely digital and increasingly personalised customer experiences, banks have realised the importance of collaborating and partnering with Fintech companies. These strategic partnerships allow banks to align their products and services with dynamic customer expectations more quickly.
An increasing number of partnerships between banks and Fintech companies result in the acceleration of the Open Banking process, which involves the opening up of the bank’s APIs to third parties, allowing them to offer a greater variety of services.
How Banks Can Collaborate More Effectively
- Ensure Agility
Banks and Fintech companies must ensure that they are constantly striving to evolve in a rapidly changing market. They should work towards continuously updating their systems and operations to successfully adapt among the competition.
- Innovation is Key
Banks and Fintech companies in partnership must ensure to stay ahead of constantly evolving customer needs. The process of innovation takes a long time to realise from the point of inception. Constant efforts to innovate will keep banks ahead of the game in the competitive industry.
- Focus on Strengths
For a partnership to be successful, banks and Fintech companies must ensure regular dialogue that can enable them to align with stakeholders and ultimately customers more effectively.
The Future of Banking
The evolution of banks in operation as BaaS – Banking as a Service – is gradually reshaping the way banks operate. Banking as a Service makes it easier for banks to deliver a complete range of products and services to its esteemed customers.
Banking as a Service (BaaS) will ultimately accelerate digitization of banks, thus offering a new level of flexibility to customers.
By tapping the potential of end-to-end Banking as a Service, banks can also enhance process-related efficiencies that can help to strengthen their own businesses.
By 2020, strategic bank–Fintech partnerships are expected to impact up to 80% of existing banking revenue streams, as a result of banks embracing disruptive technologies and new operational capabilities.
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