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Banks collaborate with fintechs: If you can’t bury them, marry them
Many believe that conventional banks will eventually catch up to financial technology (fintech) platforms and digital banks in terms of retail banking competitiveness, but industry players hinted that collaboration with them might be the key to success as it can be more efficient.
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US dollar and euro banknotes are seen in this illustration photo taken on July 17. (Reuters/Dado Ruvic)
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any believe that conventional banks will eventually catch up to financial technology (fintech) platforms and digital banks in terms of retail banking competitiveness, but industry players hinted that collaboration with them might be the key to success as it can be more efficient.
Bank HSBC Indonesia IT director and chief operating officer James Rex Elwes said on Oct. 5 that retail banking has the fastest transformation, so fast that several conventional banks are failing to offer the same convenience to customers as fintech and digital banks did, hence the need for interaction.
“The ability for customers to report their payment data and shift seamlessly from one bank to another, from one financial institution to another, it's definitely the future. I think that will have huge implications. I think it has massive customer satisfaction and massive customer experience benefits,” said Elwes.
“I think it brings opportunities to banks and financial institutions, but I think those can only be unlocked if we improve the way we collaborate across banks and financial and non-financial institutions,” he added.
Speaking on the same stage with Elwes at the World Financial Innovation Series on Oct. 5, Amar Bank chief technology officer Kevin Kane said that collaboration with digital industry players is just as important as those between banks and to emphasize his point, he raised the case of time relevance.
“I think some of the banks just don't want to lose on the timing. They just follow but they don't exactly know what kind of product they should offer their customers. [Digitization] requires 1-two years of development, and by [the time they finished the development] they already lost the momentum. That's where the fintech players are better than conventional banks,” Kevin said.
“When these fintech [firms] come into the picture, implementing new things and new features, they don't need two years of development. They only need three months in technical terms, two to three spins and it goes to production,” he added.
