A new survey launched today by ING Bank and Illuminate Financial2 has found that fintechs and banks believe they are partners in disrupting the financial services market.
The vast majority (70%) of banks surveyed view fintechs as enablers and playing a positive role in supporting the wholesale banking sector. This might come as a surprise to those who have positioned the businesses as direct competitors.
However, the relationship is not without challenges. Both banks and fintechs agree the primary challenge in partnering together is navigating organisational decision making. Sixty percent of banks acknowledge that it can be very difficult or difficult for fintechs to connect with the relevant people in banks and 78% of fintechs agree.
When it comes to the main drivers of partnering, fintechs recognise compliance, operational costs and competitive pressures as drivers for bank adoption of fintech solutions. However, the survey results also show that client attraction and retention is the main driver for half of bank respondents, while only 10% of fintechs believed this was a main driver for banks – suggesting a disconnect between the two.
Both sides were clear on where fintechs can currently offer banks the most value: compliance and know your customer (KYC).
Ian Hollowbread, a Director for CAO Enterprise Office at ING comments: “Customer expectations are changing, which in turn is driving innovation. We are committed to providing our customers with a high standard of service and meeting their technology needs. Partnering with fintechs allows us to develop products and services to empower our customers to stay a step ahead by making banking with ING convenient, clear and easy.”
Mark Beeston, Managing Partner at Illuminate Financial, comments: “The feedback we are hearing from the capital markets fintech community is clear: we need to narrow the gap between large financial institutions that need solutions and early stage entrepreneurs that provide them. A long, complex and often costly sales cycle continues to lock innovative technology out of the banking sector. We look forward to working closely with ING to breaking down this barrier.”