What is happening with bank-FinTech partnerships and has it really taken off?
As an innovation advisory and research firm, we wanted to provide our take on this in a very data-driven approach. We think that bank-FinTech partnerships have emerged as a beneficial path of growth for both sides. For traditional financial institutions (banks), working with FinTech startups enables them to integrate technologies for customers without having to build solutions from scratch. For FinTechs, the collaborations mean access to a broader range of customers through well-established industry names and deep pockets – this is where banks’ innovation programs and accelerators come in.
Banks and financial institutions have started acceleration programs, incubators, and innovation programs to partner with FinTechs and in some cases, to provide guidance and funding to FinTech startups.
For instance, consider BBVA’s innovation program in Spain. Carlos Torres Vila, CEO at BBVA, explains the reason behind the bank’s innovation programs, said, “We are seeing now that even after so many years, all the new companies are doing the stuff that we do in a better way with a superior value proposition and lower cost because you are leveraging new technology.” He also talked about newer channels. “Customers are speaking with their feet; they are moving to new channels. They are clearly unsatisfied,” he added, admitting that “our model (brick-and-mortar) is under disruption.”
Accelerator programs aim to facilitate the development of projects and provide startups with the tools to establish strong value propositions. Accelerators enable startups to have the best chance of achieving external funding and business growth in a span of 12–18 months.
Innovation labs are strategic