Community banks and credit unions have been slow to partner with fintechs. Some are wary they’re just trying to steal your business, while others have security concerns and still more might be wondering, ‘what’s a fintech?’
The concern over ownership of your customers or members’ data is real, so many begin from a position of not partnering on ‘frills’ they don’t need. But when your institution is staring down the very real need for digital transformation and considering the expense and headache – believe me – of the expertise and capabilities necessary to journey down that path, business partners are crucial to get you there efficiently and effectively.
As smaller community institutions, scrapping for every win in consumers’ hearts, minds and wallets, leveraging the expertise of others, including fintechs, is a smart option. Check out this previous blog I wrote about Cattaraugus County Bank’s experience partnering with Vetter. Business partners help financial institutions wow customers, at which Deloitte’s Center for Financial Services found financial institutions are not so hot compared to other brands consumers deal with on a daily basis. Plus, partnering decreases your initial capital outlay, as well as risk.
Those community banks and credit unions that recognize the value of partnering, particularly in the digital space, will be the ones to succeed. Do what you do best and outsource the rest! Because some fintechs are trying to take your business, but others are simply working to expand your business alongside their own. Solid, strategic partnerships allow financial institutions to grow their business while also providing indirect access for their business partners. It’s a win-win. The possibilities are endless.
When seeking out business partners, financial institutions should look for providers that:
One in three consumers were digitally active consumers as of 2017, so whether they’re active with your financial institution or retailers for whom your credit cards could be used, it’s important for smaller institutions to accelerate their digital transformation. JP Morgan – I know, not on the same scale as your institution probably, but there’s still a lesson to be taken – automated some of its legal work through a business partner called COIN, according to Digitalist Magazine, cutting up to 360,000 hours of reading and sorting through compliance information with fewer errors. Partnering with and investing in fintech can save your institution time, money, risk and more. It’s time to revisit the value your business partners can bring your financial institution.