EXCLUSIVE: “The Partnership Approach” – Prasangi Unantenne, Wise Platform in ‘The Fintech Magazine’
Prasangi Unantenne, Head of Implementation for Wise Platform, addresses the top five misconceptions institutions have about working with fintechs
Bank/fintech partnerships have come a long way over the last few years, but common misconceptions about how they work and what they can achieve still remain.
It’s easy to see why, because – on the surface – incumbents and fintechs have many differences. At Wise Platform, we work with more than 50 bank and business partners, many of whom have shared their concerns about how a partnership with us would work behind the scenes.
Here are the five most common concerns, and how we assuage them.
1. It’s always a better use of resources to build infrastructure internally
When weighing up where to invest in developing new infrastructure internally and where to seek out a partner, key considerations are the time and resource each option will take. In our experience, banks save significantly when partnering with a fintech, in comparison with developing or building upon a product themselves, and can achieve results more quickly for less.
This is because they immediately gain the expertise of fintechs who have spent years developing their product. So there are no lengthy research and development processes – the end product is ready almost immediately, and the integration can take place in a matter of months.
In the case of Wise Platform, our partners gain access to an advanced platform and digital user experience along with the expertise of more than 600 engineers who are focussed solely on international payments. This provides an instant uplift in knowledge for our partner’s company without additional hiring and training, and goes beyond the technical build, to support operations teams, too.
2. Partnering with a fintech might push users away from a traditional bank
Some feel that partnering with a fintech is an admission that their service is better. But fintechs and neobanks are already enticing many users away from traditional banks by offering a range of innovative products, which are often designed to simplify certain features of the traditional banking experience.
Seventy-five per cent of consumers globally, according to Statista, have already adopted at least one fintech for money transfer and/or payment services. By taking advantage of readily available fintech infrastructure, traditional banks actually disincentivise customers from searching for alternative solutions and gain a foothold with future generations of consumers. If you bring new products to your customers that more closely suit their needs, they have no reason to search further afield.
In fact, far from losing customers, you might attract them from other banks that aren’t making the most of partnerships.
3. Partnerships introduce complexity that creates a high-risk environment
In fact, the opposite is the case in a successful partnership. But first, fintech and bank must communicate effectively from the get-go on the requirements – both internal and regulatory – that need to be followed. By leveraging not only the support of its own compliance teams, but also the experience and knowledge of the partner’s compliance, risk, and fraud teams, as well as dedicated delivery and support teams, the bank instantly expands its knowledge and controls to help mitigate risks.
Neither do partnerships have to be complex to be effective. Wise Platform’s plug-and-play solution requires very little integration and goes live in a few weeks, allowing customers to cheaply, quickly and conveniently send money abroad.
4. Fintechs and banks are too culturally opposed to be able to work together effectively
There’s no doubt that incumbent banks operate differently from fintechs, and these differences are reflected in the culture of each organisation.
For example, at Wise, we have an in-built structure of radical autonomy, which means each team and individual Wiser is given a huge amount of independence and ownership over their work. This allows us to get stuff done quickly. Sometimes this method of working can be quite different to how our partners operate. That said, we’ve found partnerships can create an environment in which both sides work creatively and constructively together, each offering fresh perspectives that help drive innovation forward more quickly.
This is exactly the environment required to produce exciting new products and services that make life easier for a bank’s customers.
5. Partnerships should only be sought for products and services that the bank doesn’t already provide
While this is an understandable point of view, it may mean opportunities to improve vital existing services are overlooked. This has the same effect as not having the service at all – customers may see a better option elsewhere and switch providers.
Banks may be reluctant to change course if they have already invested heavily in a product internally. This is the sunk cost fallacy – the idea that abandoning the current trajectory is not an option, even if it would be beneficial.
A partner can build on what a bank has and improve it in a fraction of the time and at a fraction of the cost.
Wise Platform has built a global payments infrastructure to revolutionise how money moves around the world. We save partners years of development costs and growing pains, allowing them to innovate quickly and serve, retain and grow their customer base. We work closely with our partners to understand their needs and create a best-in-class cross-border payment experience
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