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Why Partnerships are Key in Fintech: Insights from Philipp Buschmann, Co-Founder and CEO at AAZZUR
Partnerships have been identified as critical components of success for businesses in any industry.
However, when it comes to fintech, the importance of collaborations cannot be overstated.
Below, we will examine why partnerships are key in fintech, based on insights from Philipp Buschmann, co-founder and CEO at AAZZUR.
A Win-Win for all Parties Involved
In fintech, companies can leverage partnerships to gain access to products and services that they would not be able to produce on their own.
As Buschmann notes, “Every company specializes in its own niche and can bring its expertise and unique experience to the collective project making itself irreplaceable.” Additionally, partnerships allow companies to reduce production costs, increase sales, and create the most effective product for customers, thus retaining existing clients and acquiring new ones.
It is important to note that partnerships require constant engagement between the parties involved. If communication is neglected or the partners do not engage equally, it is likely that trust will not be fully developed, and the product will not achieve its full potential.
Building Credibility and Reducing Development Costs
Partnering with established financial institutions can help many fintech companies gain credibility and legitimacy in the eyes of their current and prospective consumers, as well as other stakeholders.
This is particularly important for fintech companies that are operating in heavily regulated industries such as banking and insurance.
Additionally, by teaming up with other companies, fintech companies can share development costs and repackage or bundle products and services more effectively, saving their budget for other priorities.
One Partnership Leads to Another
If a company teams up with one partner and the cooperation turns into a fruitful experience with positive results, there is a high chance that they will be introduced to the partners of their partners.
Knowing many partners will enable a company to diversify depending on the project they are working on and choose the most suitable partner.
It works the same as networking, where building relationships with different people expands your chain network.
Delivering the Best Product Possible
Every fintech company specializes in its niche and usually lacks expertise in other areas. By partnering with other fintech companies, a company can gain access to new technology and expertise that can help improve their products and services.
Additionally, partnering with other companies allows a company to enhance their own product offerings and provide more comprehensive solutions to their customers.
For example, a payment processing company may partner with a fraud prevention company to offer a more secure payment solution.
Case Study: AAZZUR and Rails
In early 2022, AAZZUR partnered with Rails, a leading embedded finance experience platform, to offer a ‘Front-end-as-a-Service’ offering for DACH (German, Austrian, Swiss) clients.
The partnership enabled AAZZUR to increase its number of compliance-ready core banking products while becoming the front-end BaaS provider for a large number of Rails’s DACH clients.
Rails provided regulatory and technical expertise via its payment infrastructure for accounts and cards management, while AAZZUR offered front-end layers, integration, and value-added financial products to DACH clients of both companies who want to enter the BaaS and embedded finance space or even build their challenger bank.
Final Thoughts
Partnerships have become increasingly crucial for businesses in the fintech industry.
From reducing development costs and gaining credibility to delivering the best product possible, partnerships can be key to producing the highest quality results most efficiently.
It is important to remember that partnerships require constant engagement and communication between the parties involved to achieve their full potential.
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