Today, banking and payment systems need to be seamless. Everything must be streamlined for users who are expecting faster transactions, ease of use with technology, and more to align with their financial needs.
Today, 82 percent of financial institutions plan to increase their Fintech partnerships in the next three to five years to keep up with evolving, consumer demands, according to a recent report by PwC Insights.
For a successful partnership, banks should know their individual, company goals. What is your end result? What are the needs of your customers or merchants? How will this technology fill a major void in your company and expand business? It’s not just about having the hottest, new innovation or technology, alone, for the sake of having it.
The same goes for startups since they also have their own goals. “Startups and big companies live in very different world,” said Serguei Netessine, Wharton professor of operations, information and decisions, in a Wharton University report following the Fearless in Fintech Conference, which recently took place at the school’s San Francisco location. “They hire people differently, they operate differently.”
Regulatory compliancy can be another monkey wrench thrown into the partnership mix. Most of the time, startups don’t speak this language, so when they get a laundry list of policies from a potential partner, there’s a pause. This is a chance for both sides to educate one another and further build their business bond.
Data security issues are also something that should be addressed from the start. Banks and startups should make sure they have all their boxes checked and are compatible on this level as well to prevent breaches and other security issues.
Overall, both parties just need to always look at the big picture. “When we think about partners, especially when we think about partnering with fintechs who may be really innovating in the space … partnership is the best due diligence you could ever do,” said Denise Leonhard, head of global credit expansion, business development and expansion at PayPal in the report. “If you do a pilot with a partner, make sure you’re kicking the tires on the tech, kicking the tires on making sure you can work together.”