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Building a Better Bank Through Fintech Partnerships

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Banks are actively pursuing fintechs—by buying, investing, or licensing—and there’s a lot both sides can offer. The story has shifted from fintechs as disruptors to “rebundling” banking services through win-win partnerships that better serve customers. Read on for some strategic approaches to building a successful relationship.

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Building a Better Bank Through Fintech Partnerships

  1. 1. BUILDING A BETTER BANK THROUGH FINTECH PARTNERSHIPS DAVID POOLE & MAURICIO FIGUEROA
  2. 2. 2 Why Partner? Banks are actively pursuing fintechs—by buying, invest- ing, or licensing—and there’s a lot both sides can offer. The bank has the capital and a trusted brand. Fintechs bring the speed, digital-first experiences, and modern technology. While fintechs have been successful in “unbundling” the bank, the story has shifted from fintechs as disruptors, to “rebundling” banking services through win-win partnerships that better serve customers. “Rebundling” the Bank When fintech began to make headlines around 2012, the wider belief by Silicon Valley was that the “unbundling” moment for banking services had arrived, and banks would face death by a thousand cuts. But displacement is no longer the concern, as fintechs and banks alike have realized the potential value unlocked through strategic partnerships. Partnering with fintechs also helps banks counter the real threat posed by internet giants like Google, Amazon, and Facebook. With Facebook’s new EU payment license and even retailers like Starbucks holding billions in customer balances, this is not a threat left for a wait-and-see approach. Bank partnerships with technology firms are as old as banking. They’ve held long-standing relationships with providers for their most critical components, like core banking, compliance platforms, and now cloud computing. What’s new is a shift from back-office enhancements to inno- vation in the front-office. Fintechs provide banks a source of outside R&D; by both ideating and producing innovations, they quickly and clearly demonstrate their value. The agility of fintechs and availability of APIs also make it easier for banks to adopt and scale.
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  4. 4. Delivering on the Promise of the Partnership There are many advantages to strategic partnerships with fintechs. But there are also many hurdles: How do you decide whether to build, buy, or partner in the first place (or some combination thereof)? Who is the right internal team to own the partnership, and how do they fit that in with their existing responsibilities? And what are the best practices and processes for organizational alignment across the company? SapientRazorfish is a digital transformation partner purpose-built to unite the CMO and the CTO, the deep enterprise-wide technology know-how and the customer-driven creativity, to answer these and other questions. Our unique approach enables banks to harness the speed and improved customer experience offered by the best fintechs, and integrate both the spirit and the practice of that innovation back into the organization. Through financial services expertise, strategy, experience design, and technology implementation, we help banks ensure the success of the partnership to ultimately boost their brand and their business. David Poole Financial Services Center of Excellence, SapientRazorfish Boston dpoole@sapient.com David Poole leads SapientRazorfish’s Financial Services Center of Excellence, which supports a global network of banking, insurance, and wealth management clients in thought leadership, innovation, and customer insight. A change agent with over twenty years’ experience, David shares his passion for making it fun to be financially healthy. Mauricio Figueroa Strategy, SapientRazorfish New York mfigueroa@sapient.com Mauricio focuses on enabling customer-centric experiences within financial services, at the intersection of advisory, product innovation, and customer experience across wealth management, digital banking, and asset management. 4

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