Article

Fintechs & banks

Partnering rather than competing

As fintechs mature, incumbent financial institutions expect more from them, demanding practical solutions that address specific problems rather than “cool” but generic ideas. Understanding the current state of the fintech market and learning how to engage and collaborate with these tech-driven startups can enable innovation that drives true transformation and differentiation in the marketplace.

However, challenges remain that can hinder collaboration, including internal organizational and cultural issues and external issues such as regulation, lack of industry-specific expertise, and difficulty demonstrating a clear value proposition. To address these challenges, incumbents need to determine how they will measure success and establish a faster, systematic collaboration process. At the same time, fintechs need to hone their knowledge of the business of financial services and establish a clear value proposition.

While most incumbents seek more advanced fintechs, innovative ideas from new startups might provide a fresh perspective that could have dramatic impact. As the fintech ecosystem evolves, a more symbiotic relationship is beginning to emerge. Fintechs are typically free from the internal and external issues incumbents face, and incumbents can supply much needed capital and the institutional knowledge fintechs need to develop innovative solutions to real problems.

The relationship between incumbents and fintechs will continue to evolve—likely at an accelerated pace—as fintechs continue to drive transformation for FSIs. To advance collaboration, financial institutions and fintechs need to be more open-minded, tolerant, and accommodating and understand the mutual need for coexistence and codependency.
 

Philipp von Websky
pvonwebsky@deloitte.de
+49 211 8772 3867

 

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