In for the long haul: 13 things an FI needs in a fintech partner
by Ryan Walter, General Manager, Enterprise Delivery, Moven Enterprise
Much has been written about the need for banks and fintechs to partner in order to bring together innovation and speed with scale and existing customer base.
This isn't a new concept. It has occurred for decades as technology has advanced and propelled industries forward. Those who believe that incumbents will be replaced or among a handful of survivors bet on the wrong horse. In the end, some combination of old and new invariably wins out.
Blending the best of both worlds is the clear path forward. While dreaming about a long weekend away adds joy to our day, where would we be once behind the wheel without the GPS helping us avoid delays and closures that otherwise would dampen our mood?
With this realization, the question becomes "How do you ensure success?" Technology and the value that partnerships bring might get headlines, but success can occur only if the fintech and bank work together with a shared commitment to overcoming the inevitable challenges ahead.
If your partner isn't prepared, experienced, and all in, you end up with poor engagements (these currently litter the market) or shelfware. Partners must address the fundamental structure of banks — their legacy processes, siloed technology, inaccessible data, and varying regulatory requirements — in a unique way that no boilerplate model or turnkey answer can manage by itself.
If your partner views you as just another customer who's exited the pipeline, you'll soon see how important to them you truly are when the first inevitable curveball is thrown your way.
If your partner's measure of success isn't the same as yours, and if they can't show past results that support their claims, you are placing your trust in someone who will get off of the roller coaster before it even leaves the station.
Consider the following when evaluating a potential partner and their contribution:
- Do they bring the necessary capabilities and experience?
- Does their corporate mission and product strategy support your success now and into the future?
- Have they matured their process and approach to be flexible and robust?
A fintech partner must bring these crucial capabilities to the table:
Experience — Your fintech partner must have staff with significant industry and technology experience — people who have seen it all and can get you through the tough times. If they don't understand what it means to be in your world, how will they ever help you reshape it?
Change-management expertise — Almost any integration requires inherent change in the organization. You should always ask, "How has a potential fintech partner led organizations through this?" before you finalize anything. They must possess the ability to implement change successfully.
Thought leadership — Can your fintech partner clearly meld your broader corporate into their solution? Are they sharing what they've learned elsewhere? Does their position and lack of industry bias offer a beneficial perspective? What unique viewpoints do they bring? How can your fintech partner align their product with your success now and in the future?
Customercentricity — Does your fintech partner provide a forum to gather insight not only on their solution but also on the broader objectives and challenges? Do they give you an opportunity to influence outcomes or have they moved to the "bigger is better" model? If that's the case, you've lost a key benefit that a nimble innovative player brings to the relationship.
Agility — Sometimes a bank can't "go for broke." Can your partner meet you in the middle and still drive value? Can they continue to iterate forward with you? Do they understand the hurdles and challenges you might face and is that built into the DNA of their product strategy?
Product maturation — Do they have a release cycle that will continue to deliver new solutions and updates regularly? Does this provide continued and added value while avoiding obsolescence? Will you get locked into a version that might become too costly, risky, or time-consuming to move off of?
In-market expertise — Regulations, shifting landscapes, languages and currencies are varied and lacking in consistency. Is your partner ready to work with you to understand your unique situation? Can their product support the situation and be simply and rapidly configured, or do they view any request to "localize" as an expensive and time-consuming customization?
Architecture — Does your partner embrace the latest technology to ensure that your solution will not become obsolete, but will benefiting from scale and cost-saving opportunities? Can they provide the flexibility to meet both internal and external requirements? Do they have the breadth to address the inevitable questions coming from all your stakeholders?
Methodology — Can your partner scale across vectors such as functionality, user groups and data? Is their methodology tied back to clear traceability of deliverables and individual responsibility?
Business technology — Does the company build technology for technology’s sake or are their products an outcome of first understanding value drivers and objectives?
Hypothesis-driven approach — Do they stand behind their solution and its value to your company? Are they willy-nilly in their approach or do they clearly state the problems and hypotheses that will be addressed and then actively engage and measure success?
Subscription model — Do they sell you a license and forget about you or are they under a true subscription model where they need to continually prove value and earn your ongoing business? Pick a partner to whom customer retention is paramount.
Customer care — Do you get sent to a call center or does your partner provide you with the number for a contact who is vested in your success? Once ink is on the paper, do you still feel they are bought into your vision? Do you only hear from them 30 days prior to your renewal date?