5 Common Misconceptions About Partnering With Fintechs – And Why You Should Ignore?  

We can easily notice the relationship between the Fintechs and the incumbent banks coming closer, but even as the positivity of partnership becomes ever-clearer, a few of the common misconceptions about partnering with Fintech still remain a curious question to answer. In this article we shall be highlighting 5 of the most common misconceptions we come across:

1. It’s Apt To Build Infrastructure Internally  

While deciding where to invest in developing new infrastructure internally and where one would seek out a partner, one of the key considerations is the time and resource each option will take. It seems like an ongoing partnership with a fintech will take up more potentially costs more money, than a one-time infrastructure update. Yet it isn’t the case every time. Banks save significantly while partnering in comparison to develop a new product and can hold on to the results more quickly for much less comparatively. This is because they instantly gain the expertise of fintech who have spent years developing their services. This would mean no tiresome research process and the end product would be ready in no time, thereby the integration could take place in a matter of months. This equals an instant uplift towards knowledge for the respective company without going for any additional hiring and goes beyond the technical build into support which proves to be an added advantage.

2. Partnering With A Fintech Will Push Clients Away From Traditional Banks  

Another parameter could be with a fintech partnering with the banks that might push clients away from their own services through an ‘admission’ that their service is better. The Fintechs and neo banks are already enticing many consumers away from the traditional banking system by offering them a range of innovative products and services which are often designed to simplify certain characteristics of the traditional banking experience. As per statistics, 75% percent of global consumers have already adopted at least one fintech for money transfer or payment service, which would make us think that, if you are bringing any new product that is more closely suited to their needs, they will have no reason to search further. In fact, rather than losing your customers, you might attract them from other banks that aren’t making the most of the partnership benefits that could arise from it.

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3. Partnerships Create A High-risk Environment  

The complex structure of partnerships introduces quite a high level of risk to the concerned company that they wouldn’t otherwise have faced. However, this needn’t be a worry, because, any successful fintech-bank partnership communicates effectively from the get-go on requirements that need to be followed. By leveraging compliance teams’ support, the experience of the partners compliance, and dedicated delivery and support teams, one would instantly expand the knowledge and controls so as to help mitigate risks to almost zero. Moreover, to support this cause, anything does not need to be complex to be effective. At Wise Platform, the plug-and-play solutions require little in the way of integration and can go live in a few days which allows the customers to conveniently send money overseas.

4. Both Are Culturally Opposed To Work Together  

The differences between both are reflected in many things such as in the culture of each company. We can take the example of Wise, we have an in-built structure of radical autonomy each team and individual Wiser is given a huge amount of independence and ownership over their work. Sometimes this can be sometimes different from how our partners operate. On the other hand, partnerships of banks and fintech create an environment in which both sides can work creatively and constructively together, each offering new perspectives which would help to drive innovation more quickly.

 5. Partnerships Should Opt For The Services You Don’t Provide  

While it might mean opportunities to improve any vital existing services are overlooked, this has the same effect as not having the service at all clients might see a better option elsewhere and switch providers. While deciding to opt for partnerships for the existing services, banks might be reluctant to change their course of action, since they already have invested in a product internally. Banks and fintech partnership has come a long way over the last few years, but a few common misconceptions about how they work and what they can achieve still remain. At Wise Platform, we work with our partners to understand their needs and help them build a best-in-class cross-border payment experience for their businesses and customers.

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