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alternative finance, fintech

Fintech and banks' special relationship

An unconventional fairy tale in the making

Paul Surtees Jun 01, 2016

The fashionable rhetoric around fintech has previously seen the industry riding over the hill on a worthy stead, slaying the dragon which represents the world’s largest financial institution.


While this storyline makes for great, sensationalist headlines - ‘The fintech revolution that promises to finish off the big bad banks for good’ is a personal favourite – as the hype around this plot begins to die down, it is widely acknowledged by industry experts that collaboration is the key.

"Fintech has the potential to revolutionise financial services"


Although fintech is certainly disrupting the financial services sector, to say that it will topple an industry that is hundreds of years in the making seems outlandish. Banks can sometimes seem a little cumbersome and complacent, but this does not mean that they will be wiped out in a ‘financial technology revolution’.


Fintech has the potential to revolutionise financial services, not through competition, but through cooperation.


Collaboration between fintech businesses and banks is already driving innovation in financial services. Consider the partnerships between banks and new online accountancy software providers such as Xero and KashFlow. Or the likes of iZettle bringing electronic payments to the smallest of businesses through bank collaboration.

"Collaboration between fintech businesses and banks is already driving innovation"


While there are specific niche areas that are ripe for disruption, such as the FX market, the majority of fintech businesses shouldn’t be trying to hold banks to ransom. There is strong, mutual benefit to work together.


As the first online marketplace for small businesses to compare and select finance products from traditional, independent and alternative lenders - using behavioural analytics – our business is built on collaboration. Institutions hold the necessary funds, it is broken processes and outmoded criteria to assess credit worthiness that technology can fix.


The key to our business is an openness to inter-industry relationships. This is what makes the link between fintech and banks a ‘special relationship’. While it is still not necessarily the most fashionable point of view, both stand to gain through collaboration.


Fintech is likely to stall without the experience and resources of traditional financial services providers. Equally, providers require the technology, ambition and entrepreneurialism of fintech startups.


It’s time fintech got down off its high horse and tried to rehabilitate the dragon, not slay it. The end.


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