In a financial services environment that is evolving faster than ever before, innovation and adaptability are key facets of business growth for most financial institutions. Creating a seamless omni-channel experience has become a core expectation among consumers, and they now look to their financial institutions for creative and useful ways to better manage their finances. Enter Fintech.
FinTech partnerships with financial institutions is a key strategy for accelerating innovation. Financial institutions bring the allure of an existing customer base and regulatory adherence to FinTech companies, so creating a partnership can be hugely beneficial for both parties. Once you’ve decided your financial institution is ready for this step, consider the following to help make the transition as smooth as possible.
Prepare for Your Partnership
Taking the appropriate steps to prepare your financial institution for a FinTech partnership can expedite the process and growing pains associated with this transition. Specifically, creating Open APIs is a huge first step toward allowing third-party access to customer data. FinTech companies’ access to customer data and their ability to manipulate that information in ways that bring value to customers is essential for their success. Additionally, transitioning to an Open API may require you to staff appropriately, or contract someone to help you with the transition.
Align Across Organizations
One of the most important cornerstones of a successful FinTech partnership is establishing goals and defining success for both parties. How are the FinTech and financial institution mutually dependent? What resources do they need from each other? What does success look like? How will each organization successfully monetize their partnership, and what does that monetization mean for the bottom line? Beginning with the end in mind can help both organizations work together toward a successful business relationship.
Additionally, resources allocation is an important part of a successful partnership. Who will help set up an Open API if it isn’t already established? What staff members are dedicated from each organization to help facilitate the partnership? Answering questions like these is important on the front end. Additionally, it’s important for both organizations to buy into the partnership, and acknowledge that it won’t work without a substantial amount of elbow grease on both ends. Getting both organizations to go above and beyond for each other can facilitate a successful partnership.
Perhaps most importantly, both organizations should understand that a partnership is a long term effort, leading to long term return on investments that may take months or years to fully realize. Having realistic expectations about the speed of a partnership while emphasizing the mutually beneficial aspects of the partnership can help both parties get over growing pains. Additionally, each organization should lean on each others’ strengths and areas of expertise to help them get over difficult periods. And, last but not least, consider bringing on a neutral third party to help navigate your partnership. A consultant who has worked with these types of partnerships before can help set realistic expectations, prepare both organizations for the most difficult parts of a partnership and ensure that everyone is working toward a common a mutually beneficial (and profitable) goal.