Why app partnerships are accelerating the future of bank and fintech collaboration
In an era of digital-first convenience, financial institutions are under increasing pressure to evolve. Consumers are demanding more convenience, personalization and choice from their financial service providers, who are struggling to keep up with these rapidly changing consumer expectations.
The World Fintech Report 2020 revealed that 50% of consumers now say their financial services provider doesn’t deliver a personalized experience, while 48% of new-age consumers were frustrated by a narrow range of products and services.
In this scenario, the strongest option for financial institutions is to turn to the challengers driving change in the industry – fintechs. A growing financial ecosystem now offers the chance to match specific solutions to consumer pain points via an app-based collaboration, delivering change fast, while keeping financial institutions in control.
Digital transformation traditionally relied on a total replacement of core systems – a risky and costly endeavor. However, APIs now enable what Deloitte refers to as ‘microservices-based architecture... providing access to and from other internal and external services’, augmenting the core system with new solutions.
Fintechs are going beyond traditional financial services to create marketplaces of specific services that add value to client relationships, internal processes and product development. By matching the right service to a problem or goal, financial institutions can quickly find solutions to pressing business challenges, accelerating progress and driving change while at the same time mitigating transformation risk and resource drain.
A strategic approach to partnership
While each financial institution has unique needs, app marketplaces offer a high degree of flexibility and a variety of options to choose from. Financial institutions may even find that there are multiple app options for augmenting their offerings. In this instance it can be helpful to work with an approved finance app marketplace that pre-vets solutions and developers which can help significantly save on implementation time, cost and risk.
Finding the right partner
The World Fintech Report 2020 identifies a three stage-process for selecting and implementing app solutions:
- Identify opportunities by creating an end-to-end consumer journey map that shows all potential optimization opportunities.
- Analyze performance at each stage of the consumer lifecycle against competitor service offerings to prioritize mid and back-end processes that have maximum impact on operational efficiency and consumer experience.
- Collaborate with fintechs to digitize workflow elements and experiences, improving performance.
By approaching app selection in a targeted way, financial institutions can deploy specific solutions at each stage of the consumer journey in order to steadily keep up with the rapidly changing and evolving consumer expectations.
Marketplaces in action
Finastra’s FusionFabric.cloud platform enables financial institutions to connect to a wide array of innovative fintech offerings designed to solve their most pressing challenges. Financial institutions can access the FusionStore, browse for, and select, the app that solves their business need, and leverage the out-of-the-box pre-integration in order to quickly realize the value of the app.
Financial institutions can quickly update their service with consumer facing solutions that automate support inquiries, accelerate on-the-go transaction approvals or provide enhanced visibility over consumer needs and engagement. Internal apps include cloud risk management, internal retail analytics and fraud detection software to help drive performance and team efficiency.
With all fintechs and applications pre-vetted for quality and relevance by independent experts, financial institutions can make safe and reliable choices, faster.
The open financial future
As digital becomes the standard means of finance engagement, financial institutions will need to offer consistent, seamless experiences across their product suite. Apps help financial institutions close specific gaps in their digital solution offerings and upgrade the most pressing technical issues without instigating an end-to-end review of core infrastructure.
Financial institutions and fintechs will both play a key role in the next stage of financial services innovation, but this requires both sides to see suitable ROI from their partnerships. By working on specific challenges, fintechs can maximize value added for their financial services partners, while financial institutions offer access to a wider addressable market. With increased focus and clarity both partners benefit, and more importantly this ultimately benefits the end consumer.
Finastra works with the world’s most forward-thinking financial institutions to drive digital value at scale. To find out how you can take the next step on your transformation journey talk to one of our team today or browse the innovative apps already available on our marketplace.