Fintech Partnerships: Bringing FIs closer to their customers
To partner or not to partner?
Today, the question is not if, but when you should pursue a fintech partnership. There are a variety of reasons why community banks and others are looking beyond their internal resources to better meet customer needs and achieve growth. The most compelling reason? One need only look at changing market dynamics across the board to see exactly why forming strategic tech partnerships makes sense.
One key factor is the changing demands (and age) of your customer base. According to Pew Research, more than one-in-three workers in 2019 are Millennials, making them the largest generation in the U.S. labor workforce, and still growing. Millennials and Gen Z grew up on the Internet, smartphones and social media, and expect much more from their world, their workplace, their relationships, and yes, even their banks. And while millennial customers certainly demand and enjoy the convenience of digital and mobile banking, an overwhelming percent (71% according to JD Powers) demand, yes you guessed it, in-person visits to their local bank branch.
So how do banks and other FI’s continue to improve their in-person customer experience, yet evolve and improve their digital offerings in a timely, scalable manner? For many banks, partnering with third party providers can provide the key to success while minimizing cost, risk and time-to-market.
For banks (and not surprisingly for most organizations and industries) the digital transformation process is often slow, very expensive, and comes in three basic varieties: building your own internal capabilities, partnering with suitable third-party provider, or do nothing at all. There are dozens of benefits to partnering with the right provider (or providers) and we’ve described partnership benefits into three main groupings below:
- Simplified Deployment In the financial services industry, the decision to “buy vs. build” new technology often comes down to your own internal expertise and core competencies. Does your financial institution have the required IT, project management, engineering, and other human capital necessary to design and develop what your customers are looking for? If you are a small to mid-sized bank, finding the right resources internally can be a challenge. Maybe you tried the DIY approach, only to discover that you underestimated the time, cost, and human capital requirements required. Considering the cost and complexity of these projects, partnering can enable you to achieve faster, more tangible ROI.
- Expertise-driven Solutions Early lessons have taught FIs that taking advantage of the customer-centric, personalized approach fintechs offer doesn’t always mean that their partners understand financial regulations that banks and credit unions take for granted in their daily operations. Fintechs are all about speed: speed-to-market, rapid response, fast delivery. FIs know they need to take the time necessary to get it right without risk to existing customer relationships and meeting compliance demands. Finding the right partner with banking expertise and an understanding of what FIs require from a security perspective is a key differentiator in creating and developing solutions to many FI-specific challenges, from building relationships to selling products.
- Maintain Customer Focus One of biggest benefits of a partnership is the ability for financial institutions of any size to maintain a sharper focus on meeting customer needs. These solutions offer you with a range of tools that are ready to go, helping you understand your customers through user-friendly dashboards, painting a fuller picture of your customer base through lifestyle and predictive buying insights, and providing immediate analysis on your success. These solutions are available today, enabling FI’s to quickly deploy campaigns, analyze results, and deliver or develop new products and services based on behavioral trends and demographics. FIs that are operating on yesterday’s customer engagement model lose relevance with their current customers, making it more challenging to grow those relationships. By partnering with the right provider, your marketing and customer service teams can operate at the speed of your customers with proactive, and not reactive products and services.
Fintech partnerships make good business sense, enabling faster, more cost-effective digital transformation. To learn how Saylent is enabling FI’s of any size to maintain a customer focused approach through readily available analytics, personalization, and predictive services, visit our product page here https://saylent.com/products/saylent-engage/