A few weeks ago, I joined a fantastic panel of speakers on the 11:FS Fintech Insider podcast. This is one of my favourite fintech podcasts, so it was an honour to be a guest – especially among such great company!
Alongside me on the panel was Nicole Perry, Strategy Director of Digital Business Design at 11:FS, Martin Häring, CMO at Temenos and Josh Williams, Chief Banking Officer at Seattle Bank. The topic on the table was partnerships – between fintechs, service providers, banks and everything in between.
Here at Seccl, partnerships are integral to how we work. In 2022, we’re seeing more and more firms looking to partner with others to extend, enhance or improve their value proposition and provide a better overall experience for the end customer. In our space, that means firms looking to offer an investment proposition using our technology – which is a perspective I was keen to bring to this discussion.
What is the current state of fintech partnerships?
As Fintech Insider host Simon Taylor points out, there has been a huge shift in the partnership space in recent years. What once was a rivalry – say between banks and fintechs – has now become an opportunity, and so the market is really changing shape for all involved.
This podcast episode tackles a number of questions: what is the current state of fintech partnerships in 2022, what challenges do we need to overcome, and what are the possibilities for the future?
You can listen to the whole episode here – and I’d definitely recommend it if you’re interested in partner ecosystems or just want to know what’s happening in this space.
For now, however, I thought it would be useful to summarise some of the key takeaways from the discussion :)
There is an increasing appetite for bank/fintech partnerships
Increasingly, banks are looking to bring innovative fintech partners under their umbrella to improve their value proposition and create a better customer experience.
According to Nicole from 11:FS, almost 9 in 10 financial institutions now think fintech partnerships are important for their business, which is up from 49% in 2019.
“Personally, I think the tide has turned from banks seeing fintechs as competitive,” she says. “Partnerships are the only way to keep up with the market and continue to meet their customer’s expectations. They have to build on each other’s competitive advantages and capabilities.”
Josh from Seattle Bank then shares that the issue most banks come up against when trying to secure valuable partnerships, is that the bank’s technology is not always open or scalable. He describes this as a “holistic, architectural challenge.”
Early communication is everything when it comes to partnership conversations
In my role as Fintech Growth Lead at Seccl, I speak to founders daily, and for me it’s all about taking the time to introduce them to who we are, our APIs and our environment – and to understand their needs and concerns through open and honest conversations.
Nicole adds that this open communication is more important than fast movement when it comes to partnerships: “Banks should take the time to understand what their customers need rather than rushing to react to the market and match what other banks are doing.”
Due diligence is key
We also talk about how companies need to invest in proper due diligence when partnering with another firm.
Josh Williams from Seattle Bank says, “You have to balance the business, the tech and the regulatory factors on any partnership, and if you don’t solve them by design up front, you’re not going to get a viable long-term solution.”
How do we create better partnerships?
We discuss this at great length in the podcast, but one of the takeaways from the discussion was the need for companies to partner vertically, as well as horizontally, if they want to create successful ecosystems.
An example Martin provides is a bank creating a home buying journey, not just offering a mortgage product. “The vertical integration is the tech, the horizontal is creating great customer experiences,” he says.
Additionally, in our customer team here at Seccl we define partners as much more than just clients. We have recently started building ‘ecosystem partners’ for our clients as they launch, including the likes of compliance consultants, principal firms, developers, payment providers and more. Together we can all work to ensure the client’s investment proposition launches successfully.
To find out more about this topic, listen to episode 609 of the Fintech Insider podcast here.
As always, if you have any questions off the back of the podcast, or about how we partner with advisers, investment managers and fintechs, do not hesitate to get in touch – I’m always happy to chat.