Fintech Trends 2021_More Collaboration between Banks and Fintechs

The effects of the COVID-19 pandemic have led many banks to finally realize the importance of digital transformation. Customers could no longer visit physical bank branches, employees had to work from home, and the demand for digital services exploded, prompting bank executives to step up their digital game.

Banks, however, face one major challenge: they are not technology companies. They excel at customer support and understand financial management but are not technologically advanced yet. That is why in the past, most banks that tried to develop in-house technology have failed. 

Fintech Firms as Partners 

So what is the solution? Teaming up with FinTech (Financial Technology) companies. Over the past couple of years, most banks have viewed fintech companies as competitors. And in some cases, that is undoubtedly true. Many challenger banks have attacked the banking value chain and tried to snatch away customers from the longer-established banks with advanced digital services. But many fintech businesses also position themselves as partners for banks, offering technologies that banks can integrate into their legacy systems to digitize their existing products and services and further enhance their customer service. This can and will likely be a major trend in 2021, encouraging more banks to start looking at fintech companies as partners rather than competitors and thus be more open to collaboration. 

As a result, services like banking as a platform or Banking-as-a-Service (BaaS) will gain more momentum this year. Under such services, technology companies will be able to provide operating systems, development tools, applications, and servers to banks, or banks will be able to integrate their services directly into the products of other companies. This will deliver enhanced services and custom solutions to customers while allowing banks to focus on their expertise, thus reducing development time and costs.

Any bank or fintech company that can fit into the platform bank model can capitalize on accelerating digital trends. The future of finance is undoubtedly digital, and 2020 has made that obvious. The question is how banks and fintech firms can work together to make that transformation happen seamlessly. 

Get Help From Export Portal

Export Portal is dedicated to facilitating international trade by supporting businesses so that they can grow while overcoming challenges and difficulties. Our articles are focused on equipping business owners with the knowledge they need to drive their businesses to success. To learn more about us, be sure to check out our site today!