By Ryan Walter, GM enterprise delivery, Moven Enterprise
Much is written about the need for banks and fintechs to partner bringing innovation and speed together 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 either all incumbents would be replaced or be the sole survivors bet on the wrong horse. In the end, some combination of old and new invariably wins out (see Blockbuster and Pets.com).
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. After realizing this, the question becomes, how do you ensure success? Technology and the value partnerships bring may steal the headlines, but success and achievement of goals can only occur if the fintech and bank are successfully working together with a shared commitment to overcome the inevitable challenges faced.
If your partner isn’t prepared, experienced, and all-in, you end up with poor engagements (which currently litter the market) or even shelf-ware that fails to deliver expected results. The fundamental structures of banks from their legacy processes, siloed technology, inaccessible data, and varying regulatory requirements need to be addressed in a unique way that no boilerplate model or turn-key answer can overcome by itself.
When considering a partner in the journey to reshape the organization’s corporate and digital strategies, you need to ensure they are experienced, prepared, and committed for whatever may come their way. Also, importantly, you need to determine whether your partner is fully engaged when it comes to sharing in success or failure. In these cases, when sitting with the pig and chicken at breakfast marveling over the plate of ham and eggs, always pick the one walking on four legs.
If they view you as just another customer who’s exited the pipeline, you’ll soon see how important 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 they can’t clearly demonstrate past results that will support their claims, you are placing your trust in someone who will be getting off the roller coaster before it even leaves the station.
Consider the following when evaluating your potential partner and their contributions to your journey:
- Do they bring the necessary capabilities and experience with them?
- Does their corporate mission and product strategy align to support your success now and into the future?
- Have they matured their processes and approach to be both flexible and robust?
Which crucial capabilities should a fintech partner bring to the table?
Experience: Your fintech partner must have staff with significant industry and technology experience 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: With almost any integration there is inherent change needed 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 succeed with implementing key changes. If all they’ve done is bought the groceries but are unable to cook the meal, you’ll be left hungry.
Thought Leadership: Can your fintech partner clearly meld your broader corporate vision with how their solution will help you achieve it? Are they sharing what they are learning elsewhere? Is their position and lack of industry bias a benefit based on their different perspective? What unique viewpoints do they bring?
How can your fintech partner align their product with your success now and in the future?
Voice of the customer: Does your fintech partner provide a forum to gather insight from customers not only on their solution but their broader objectives and challenges? Do they give you an opportunity to influence or have they moved to the bigger is better model? If that’s the case, you’ve lost a key benefit nimble, innovative players bring to the relationship.
Agility: Sometimes a bank can’t come all the way, is their product ready and able to meet you somewhere 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? Taking you to the edge and showing you what the future could be without helping you get there is like telling a child they can be a world-class musician without providing any coaching or sheet music.
Product maturation: Do they have a frequent release cycle that is continuing 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 becomes too costly, risky, or time consuming to move off?
In-market expertise: Regulations, shifting landscapes, languages, and currencies are different, varied, and lack consistency. Are they ready and able to work with you in understanding your unique situation? Can the product easily support all of this and be simply configured in rapid fashion? Or, is any request to ‘localize’ viewed as an expensive and time-consuming customization?
Architecture: Are they embracing the latest technology to ensure you don’t become obsolete while benefiting from scale and cost saving opportunities? Can they provide the flexibility to meet both your internal and external requirements? Do they have the breadth to address the inevitable questions coming from all your stakeholders?
How can a fintech partner’s process and approach ensure your ongoing success?
Methodology: Methodology should be agile and highly transparent but configured to interact with whatever format and process is followed internally. Can they 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: Do they build technology for technology’s sake or is it an outcome of first understanding value drivers and objectives? While purchasing a Tesla Model S would indicate a proclivity to innovation, design, and even commitment to the environment, if my goal is to consistently transport 20 people and 2 tons of cargo at a time and frequently throughout the day, I’ve now bought a very expensive lawn ornament.
Hypothesis driven: 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 hypothesis that will be addressed and then actively engage and measure to determine success? Is there clear evidence to support their decisions or is everything just a salad bowl of facts they hope you enjoy the taste of, even if you were really hoping for a good steak?
Subscription/SaaS oriented: 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? The parallels of this concept to the ongoing churn and cord cutting in the internet/cable television arena are striking and telling. Ensure you pick a partner where customer retention is paramount.
Customer care: Are you a number, do you get sent to a ‘call center’ or do they provide you with someone’s contact information 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?