Fintech startups reliant on partnerships to survive

Fintech has been repeatedly hyped as a revolution in finance and banking that could create far-reaching change in the industry. The World FinTech Report 2018, from Capgemini and LinkedIn, reveals this vision is now shifting as startups move to work with the firms they were expected to replace.

75 percent of fintech executives said their primary business objective is to collaborate with traditional firms, such as banks and insurance companies. Although 76 percent said their ability to innovate more quickly is vital to success, it’s also clear that fintech firms are no longer aiming to usurp the banks. Instead, they’re looking at the broader finance industry to find ways to improve it.

The report comes amid a lull in optimism around fintech technology. While fintech firms have raised almost $110 billion since 2009, it’s now becoming apparent that tech alone won’t overhaul the industry.

Collaborating to increase efficiency, improve the customer experience and encourage long-term relationships will be critical to the success of both banks and fintech firms. Successful providers will be defined by their ability to integrate with traditional companies and expand on existing services.

“With more than 75 percent of FinTech firms identifying their primary business objective as collaborating with traditional firms, it is essential that both FinTechs and traditional firms transform their business models by collaborating to drive innovation while retaining customer trust,” said Anirban Bose, Head of Capgemini’s Financial Services Global Strategic Business Unit and Member of the Group Executive Board. “Without an agile and committed collaboration partner, both traditional and FinTech firms risk failure.“