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Partnership in the financial industry to get digital growth

Digital technology is transforming the expectations and preferences of customers, challenging the leaders of the industries to adapt and evolve their business models. The financial services industry is no exception. The massive adoption and global ubiquity of mobile phones, coupled with the digitalization of financial processes and services, has created an increasing demand for digital digital financial experiences for customers and launched a new It was about innovation in financial technology (or fintech).

Fintech innovation opens up to new opportunities

As the industry adopts the new technology, and the customer data it generates, fintech has helped drive tremendous advances in the financial services ecosystem, changing the status quo in a complex and highly regulated industry. Fintech companies are offering more personalized, convenient and affordable solutions for underserved populations and communities. The momentum in the sector has been amazing with almost $ 23 billion in capital investments deployed for start-up companies only in the last five years. Fintech’s innovation does not come only from the more than 2,000 new fintech companies. In the current market, existing financial institutions are also starting to offer their own digital products and services, as evidenced by the recent launch of Goldman Sachs’ new online lending platform, Marcus.

Looking ahead, neither start-up companies nor traditional financial institutions will be able to provide on their own the range of specialized products and services needed to cope with the increasingly fragmented financial lives of people and businesses in the 21st century.

The case of collaboration

PayPal has taken a strategic decision to operate as a bridge between the interruption of fintech and traditional financial institutions; Focus on collaboration and partnership at a time of massive change in the industry. They have adopted partnerships as a core business strategy, focusing on a new model that seeks to extend the value of  services to more customers, sustain the growth and anticipate to fast-paced economic, policy and consumption trends.

In the last year, PayPal has entered into new alliances with the largest card networks in the world (MasterCard and Visa) at the same time that we made a strategic investment in an emerging platform of financial technology (Acorns). They are steadily moving away from seeing other financial services entities through the traditional lens of competition. Instead, they are looking for opportunities where collaboration can help and partners accelerate the pace and increase the scale of innovation, for the ultimate benefit of customers.

3 fundamental and interrelated forces that have encouraged to plan and act

The new expectations of customers are taking traditional institutions out of their comfort zones. The rapid digitization of money means that traditional financial institutions must move away from dependence on physical channels to attract customers. But simply moving some services online, or creating basic mobile applications, is not enough.

Customers demand more affordable, secure and reliable digital financial services that are delivered online, in applications and in the store in a frictionless manner. Fintech innovators are meeting these customer expectations using low cost operating models that identify and resolve clients’ pain points more profitably. Partnering with top-tier digital and mobile companies can help companies with traditional financial offerings develop new models to create and deliver digital experiences that better attract and retain their foundation of customers.

The digitalization of money

The rapid digitization of money means that traditional financial institutions must move away from dependence on physical channels to attract customers. But simply moving some services online, or creating basic mobile applications, is not enough. Customers demand more affordable, secure and reliable digital financial services that are delivered online, in applications and in the store in a frictionless manner. Fintech innovators are meeting these customer expectations using low cost operating models that identify and resolve clients’ pain points more profitably.

Partnering with top-tier digital and mobile companies can help companies with traditional financial offerings develop new models to create and deliver digital experiences that better attract and retain their foundation of customers. The ability to scale remains a challenge for new fintech companies.

What are fintech companies looking up to

Most of today’s successful fintech companies focus on offering a tailored, independent offer that is not delivered through a physical footprint, but requires an adaptation to a complex set of regulations that are unique in all nations and regions. Those who expand across borders often find themselves ill-prepared to navigate efficiently in the policy environment and local compliance.

Collaboration across the financial services ecosystem can help new companies operate on a larger scale and benefit from existing international infrastructure and policy expertise to ensure that their offerings support a secure financial system. The global economy is in a constant state of uncertainty.

Big or small, new or established, each element of the financial services industry must navigate the complexity of an unpredictable future where the only certainty is the continuous evolution and digital transformation. By uniting the infrastructure, stability and financial resilience of traditional financial institutions with the flexibility and adaptability of Finnish technology innovators, the industry can withstand and overcome the changing tides and, most importantly, identify entirely new opportunities for get more value for both businesses and society.

Successful partnerships put the customer first

The dynamics of relationships with partners can sometimes push leaders out of their comfort zones. To help guide our business, we have adopted a principle that we apply to all our relationships with partners and decision-making: the customer must be at the center of everything we do; and customer satisfaction and commitment should be the key metrics through which we measure our success.

Today’s customers, particularly our millennial consumers, expect better, more profitable options to move and manage money. A customer-centric mindset means that all partners must make decisions based on what the client is most interested in, and prioritize the client’s benefits over other potentially short-term considerations.

The ability and willingness to collaborate are emerging as a strategic imperative in the ongoing digital transformation of the financial services industry, and will mark fintech innovators and competitive financial institutions.

This innovative partnership approach may serve as a model for other sectors that seek to navigate the disruptive forces of technology and train their clients with the most advanced products and services available. When done correctly, strategic partnerships can provide a path to fully realize the growth potential inherent in the digital transformation facing our respective industries. As the number of people connected and digitally engaged grows globally, more potential customers are there for all of us to serve and empower. By constantly focusing on how they can create value for these customers, they increase the ability to provide long-term sustainable results for all shareholders.

Published inFintech

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