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The Partnerships That Make Banking Happen | FIS | FF News at Fintech Meetup 2024
The partnerships that make banking happen.
That’s what we asked FIS Head of Platform Partnerships, Mickey Lynch, about at Fintech Meetup this year. In this insightful conversation he lets us know how the partnerships between fintechs and banks are essential to move the financial ecosystem forward and expands on the pivotal role that FIS plays in fostering and maintaining these partnerships.
The Necessity of Bank-Fintech Relationships
Banks increasingly rely on fintechs to enhance and power new or existing offerings, especially in core banking, payments, and digital services. Fintechs bring agility, innovation, and a closer connection to consumers, often meeting needs through embedded services and agile infrastructure that banks might struggle to match. This helps the bigger organisations stay competitive. Of course, this is all good news for fintechs, as Lynch explains, as they benefit from the established customer bases and financial backing that banks provide, and can become established providers of Banking-as-a-Service (BaaS), Lending-as-a-Service and more.
Barriers to Banks Developing Capabilities Internally
Lynch also points out that while some banks do invest in developing their own fintech capabilities, the vast majority lack the capacity to do so effectively. With over 4,500 banks in the United States, not all have the resources or expertise to focus beyond their core competencies. Many banks need to prioritise their primary banking functions and regulatory obligations, leaving limited bandwidth for innovation in areas such as core banking systems or BaaS solutions. This is where fintech partnerships become not just beneficial but necessary, allowing banks to leverage external expertise to enhance their service offerings without diluting their focus on core operations.
FIS’s Role in Facilitating Partnerships
And this is where FIS comes in, standing out as a pivotal player in fostering bank-fintech collaborations. Lynch describes how FIS, with thousands of customers using its platforms, often serves as a matchmaker between banks and fintechs. FIS’s extensive network includes corporate customers, independent software vendors (ISVs), and fintechs, providing a rich ecosystem for innovation. By understanding the needs and strengths of both banks and fintechs, FIS can facilitate partnerships that drive technological advancement and service improvements in the financial sector. This intermediary role helps ensure that banks can access cutting-edge fintech solutions while fintechs can find receptive and compliant banking partners to bring their innovations to market.
Maintaining Healthy Relationships with Sponsor Banks
In this video, Lynch also offers some practical advice for fintechs looking to maintain robust relationships with their sponsor banks. Transparency is paramount; fintechs must understand and respect the banks’ focus on compliance and regulatory issues. Successful partnerships require fintechs to work collaboratively with banks to ensure adherence to regulatory standards and enhance financial intelligence. He also highlights what FIS offers to safeguard banks in this area.
You can catch more of our conversations with FIS and indeed all our coverage from Fintech Meetup, right here on our website.
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