Collaboration can achieve faster time-to-market and lower development cost. But how do you evaluate which partner to work with?
Historically, banks have had closed systems. Over the years we’ve seen that when a new and interesting services or functionalities hit the market, banks typically try to replicate them within their environments to safeguard the platform. Today, however, there are so many innovative ideas and opportunities that it’s no longer possible to do this and keep pace with competitors. Flexibility is key. Integrating a Fintech product bypasses the long and complicated development cycles that are necessary in a closed system. This obviously saves you both time and money.
Choosing a Fintech partner
Of course, as you know, you can’t simply integrate any service into a bank’s offering. Products have to pass stringent testing and meet regulatory and security requirements. And the more third-party products that are integrated, the higher the demands are on the system and the team responsible for it. Therefore, processes have to be put in place to manage Fintech co-operations – both from a technical and relationship perspective.
So how do you evaluate a potential partner? Based on our experience we believe these are the key factors to consider:
Once a partner has been chosen, we believe it’s important to align expectations regarding goals and the collaborative processes, as well as setting achievable KPIs. You should also set up a plan for communication, data exchange and storage. Involve project participants at an early stage so they understand the scope and delivery plans. Establish clear process for monitoring and control. And lastly, set parameters for potential changes in delivery, after all technology will continue to advance even through the project is in progress.
The right model for your risk appetite
In our view, the type of collaboration and deployment model that suits your structure will depend heavily on your risk appetite and the core system setup you have, e.g., if it’s inhouse, on-prem or cloud-based. The different models include:
As an established vendor of banking services, we have multiple collaborations with Fintechs, often on behalf of banks. Through this business model, banks can get access to the service or feature, while we handle the relationship (although banks often take an active role in the collaboration) and product integration to our core platform. Using our proven onboarding processes, we have simplified Fintech evaluation and selection and ensured smooth product implementations.
Evita Kalmane-Pivkina has 20 year background in business development and more recentry is focussing on partnership management in TietoEVRY Payments