Banks must develop an ecosystem of trusted third parties using API’s that connect with a range of products and services focused around the customer journey. To build this ecosystem successfully banks must focus on five key areas;
1. Choose the right Technology
Technology selection in the context of banks is all about finding partners that accelerate their move towards becoming a Digital Bank. This is the reason why major banks are actively courting and investing in fintech companies.
2. Consider Build Vs. Buy Vs. Partner Option
Once the technology solution has been identified, banks must explore Build Vs. Buy Vs. Partner option. If the decision is to partner, they need to further consider whether they need to be an investing partner with an option to buy the technology at a later time.
3. Ensure Goal Congruency
Regardless of their differences, banks and fintech’s are trying to achieve the same thing i.e. building a successful business by offering valuable financial services, hence, its important to have an alignment on the goals right at the beginning.
4. Have the right Collaboration Model
Collaboration is all about making banks & fintech work together and should be based on “Give to Get” adaptive model where banks don’t end up calling the shots that stifles innovation.
5. Make Compliance a part of the Process
While doing anything new always carries an element of risk, it’s also important not to stop innovation and trying something new. Hence, it’s prudent that compliance becomes a part of the process to mitigate risks.