Where are the opportunities for fintechs to collaborate with banks?

Several exciting fintech/bank collaborations have been announced recently, notably Waddle/CommBank, Cashrewards/ANZ, Slyp/NAB and both Biza.io and Adatree respectively with mutual banks getting on board with open banking.With memories still fresh from our fantastic 2021 Intersekt Festival that we held over two full days in May at Melbourne’s Grand Hyatt Hotel, we reflect that a major theme for this year’s conference was, in fact, Fintech/Industry Collaboration.Reporting on our event for The Australian Financial Review, financial services writer James Frost said:“The secret to developing a lasting and successful relationship with a bank as a fintech is to keep it simple, start small and address security concerns right off the bat,” (AFR 20 May 2021) referring to comments made by David Washbrook from Look Who’s Charging, Emily Nicholas from NAB and Justin Brown from ANZ on a panel moderated by Jennifer Harrison from Reputation Edge.David Washbrook also recounted a literal “elevator pitch” moment when one of the ANZ team he was working with happened to be in a lift with ANZ boss Shayne Elliott and showed him a prototype of the app!David helpfully summarised his experience into three top tips:

1. Solve a clear problem – don’t boil the ocean
2. At least initially, consider a fixed price licence model to provide certainty around your costs as people and companies on the whole don’t like surprises, and
3. Be persistent!

Sophie Guibaud from OpenPayd joined via video to share a vision of a very particular form of fintech/industry collaboration where fintech smarts are totally embedded into a customer journey thanks to Banking-as-a-Service (BaaS) which she called “the AWS of finance.”With the help of an aero-space analogy, Toby Norton-Smith from CommBank’s X15 Ventures explained the barriers encountered when an agile fintech (an X15) is harnessed to a legacy corporate (a B52).  He espoused that the key to success is thinking about compliance like a regulated entity.Choosing a relationships analogy, with its clear stages of dating, courtship and commitment, Laura Ware from Visa helped Jacqui Colwell from Judo, Dom Pym from Up and Matt Baxby from Revolut to compare the banking single life (get your own licence) versus marriage (partner with a bank).Anthony Baum from Tic:Toc, which partners with Bendigo and Adelaide Bank for fast online home loans, agreed that it’s vital to nurture the relationship side with the bank and not just showcase your product or customer proposition.Some of the most intriguing insights on BaaS (which he thinks of as Backend-as-a-Service) were delivered by Kristofer Rogers from Mambu who exposed a schema of an unnamed bank’s home loan process to the scrutiny of the audience and asked:  “If there’s no obvious endpoint for an API, where does that leave fintech/bank collaboration?”Kris pointed out the growing gap between a typical bank’s backend systems and the customer, which foreshadows a future-state where banks are the financial custodians and apps are the customer interface.  He commented that banks may have no choice but to collaborate with fintechs to execute an innovation strategy and marry their industrial strength with the best digital experience.Both banks and fintechs know that big tech companies like Google and Apple, as well as social networks like Instagram and Snapchat, set the bar extremely high for customer experience.And the pace of technological change is unrelenting.The fintech ecosystem thrives on connecting the dots to deliver better solutions enabled via technology and delivered via collaboration.The photo gallery from Intersekt bears witness to our amazing community in action, not just on stage sharing insights, but also building connections and establishing trust over coffee, drinks and dinner.We’re looking forward to announcing the winner of “Best Partnership of the Year” at the Finnies.We predict there will be many more exciting partnership announcements to come over the rest of 2021 as fintechs collaborate with each other, with banks, and increasingly also with other industries like retail and agriculture.Watch this space. Rebecca Schot-Guppy, CEO of FinTech Australia