Four Tips For Selecting The Fintech Partner Of Your Choice

In the past three years, we've formed five strategic collaborations with fintech firms in industries such as investments, mobile payments and marketplace lending. We are known as a flexible firm which fintechs can work with. However, we are extremely selective in who we work with.

It is often asked of us at events and conferences and in the boardroom, how we select which fintech companies to work for. This is a question that should be answered from a variety of angles. Here are some suggestions to help you evaluate the possibility of a partnership with fintech companies , if you're a bank looking to partner with them.

A Strategic Fit

What does this partnership mean into your overall strategy? Finding a fintech that helps advance your goals may seem obvious, but it's easy to get distracted by the excitement surrounding fintech, so don't allow the latest trend to affect the choice of a partner. Be aware of your goals and ensure that your potential partners are on the same page. It is better to have just a few meaningful relationships than too many that can divert you from your goal or disperse your resources too widely.

Cultural Alignment:

Make sure to do some investigation into the management team of fintech, its board of directors, as well as advisory board. What is their mission and how does it align with yours? Do you feel confident in their team? The CEO of our company, Mike Butler, likes to say that we have an attitude of trying to do things, not NOT doing things. This is very important to us, and we are open to working with teams that think the same. It's crucial to establish a strong foundation early in a relationship in order to lay the foundation for a successful relationship in the future.

A strong business plan is essential:

Are they financially secure? Is their vision viable? Back to earlier commentary on not getting too caught with the latest technological trend, consider testing the idea with an individual who isn't a banker such as a friend or family member. While you might consider it a good idea, is it appealing to a consumer that isn't in our field? If the business plan meets the requirements the other thing to take into consideration is the fintech's long-term strategy and possible exit strategy, and the effect it could affect your business if the relationship were to end. It's important to understand both the fintech's shorter- as well as long-term business plans, and how they will affect your bank's balance sheet and income statement now and in the near future.

Buy-in to compliance:

Does the team at Fintech understand the importance of security? Are they aware of the importance regulation has in finance and banking? Are they aware that they might have to modify their solutions to comply with certain regulations? Fintechs sometimes feel uneasy and slow to act when looking at banks. While some might move faster than others, banks are aware that there are good reasons to be cautious and that compliance isn't something that you should have when dealing with money coming from others. We are never willing to compromise security and are certain to stress that point when we talk to customers. It is essential to locate a partner that has the same values.