Fintechs Are Friends, Not Foes: How Fintechs Can Help Banks Fill the Digitization Gap
The bank-fintech relationship isn’t always a match made in heaven. Financial institutions can sometimes view fintechs as their competitors, bent on taking their customers through technological innovations and new banking capabilities. Now that the COVID-19 pandemic has skyrocketed the need for digitization, banks should look to fintech not as rivals but as partners who can help them.
Looking back on the pandemic, we saw how accountants struggled and how 53% of businesses changed their payment terms with vendors and suppliers. The accounting industry is commonly viewed as being slow to change, but with the pandemic, accountants are making the move to digital and searching for new innovations that will make their lives easier. Financial institutions have already recognized the importance of the customer experience and digitization with personal and retail banking, but now is the time to invest in new commercial banking technology innovations.
Why Banks Should Partner with Fintechs
We are seeing a shift in the partnership landscape as new bank-fintech partnerships rapidly emerge and banks come to no longer view fintechs as the enemy. fintechs fill a specific gap in the market left open by how slowly traditional banking changes. For example, going into 2021, only 30% of banks had deployed APIs, demonstrating that banks are undergoing a necessary shift and that 70% of banks have yet to do so. When Coalition Greenwich asked commercial-banking clients to name the digital innovations from their banks that have had the most significant impact on their business, they pointed to APIs. Banks who haven’t deployed APIs will need to push for innovation quickly if they want to compete, and the effort and delivery of these innovations could be handled more effectively through the support of fintech.
Financial institutions are looking to financial technology to develop the tech they require to offer new capabilities like embedded banking. The reality is that when developing their own bank innovation projects, banks can struggle with their speed to market and the upkeep that comes with developing new technology in-house. Partnering with fintech can mitigate these challenges and allow financial institutions to focus on their customers’ needs to help them recover from the impact of the pandemic.
To compete for clients, banks must differentiate through putting their customer experience first. The digitization gap in the industry will grow more pronounced between the early adopters and those who wait. Banks who want to remain competitive and close that gap will need to advance their technology and focus on having an effective and cohesive digital banking presence and capabilities.
How FISPAN Can Fill the Gap
A recent Coalition Greenwich report outlined four key success factors of a digital platform: client-centric design, robust functionality, and ease of use. FISPAN has the agility, flexibility and resources necessary to successfully work with these banks to develop and implement embedded banking technology.
Treasurers and finance professionals are looking to their banks to deliver a more powerful contextual and embedded banking experience, with a heavy focus on ease of use and integration with the client’s banking and accounting software. At FISPAN, we make it simple for banks to remove friction and provide an embedded experience to commercial clients. We turn banking services into branded banking experiences embedded within the ERP and accounting software that clients rely on to run their day-to-day business.
Digital banking products need to be able to integrate into commercial banking clients existing business platforms to improve efficiency, streamline cash management and create a better client experience. In a June 2021 survey, 33% of companies responded that they would like to see upgrades to their information reporting options. FISPAN is constantly developing new products so end users will have access to an entire suite of banking functionalities, and we have already developed solutions for information reporting, A/P, A/R, account transfers and more.