For any business, as it adapts or grows, likely, it can’t do everything on its own. So forming partnerships with other like-minded companies that share the same goals and values, and understand the challenges and opportunities, is the way forward.
Instead of seeing technology companies, or tech, as a competitor or suppliers, collaborating as partners, or working as a team, Banks can deliver faster, better products and services. It benefits them, their customers, and all the stakeholders.
In fact, this is already happening. According to IDB statistics, 34% of Latin American fintech firms are collaborating with traditional financial entities.
For example, Bankingly successfully works with many regional and local banks, cooperatives, and microfinance institutions to aid financial inclusion. It has a presence in 15 countries across Latin America and Africa, assisting over 3.5 million banking customers.
They can be formal, like a joint venture or strategic alliance.
What are the advantages of joining hands?
- Focus: Banks aren’t in the business of creating and managing software and hardware. Technology is a means to an end. This allows them to concentrate on what they do best, improving their strengths and developing core competencies without reinventing the wheel.
- Lower costs: By partnering, they can eliminate expensive investments for setup, R&D, support, and expansion. Fintech is a SaaS model. To achieve that, in the past 20 years, tech companies have invested in robust global cloud infrastructure with economies of scale – banks can take advantage of this with zero capital expenditure. With Bankingly, they only pay for usage, get free support, updates, and up to 45% fewer branch transactions. This reduces the costs of maintaining or setting up new branches.
- Happier customers: Customers today expect to fast service from anywhere, anytime. By partnering, banks can provide personalized, 24/7 self-service based on the customer profile across mobile, social media, WhatsApp SMS, phone, and the web. This complements ATMs or branches they have. There is no waiting or queuing. Instead, AI chatbots can respond to standard questions in seconds, allowing bank employees to focus on client interactions.
- Improved efficiency: Banks receive cutting-edge technology tools and best practices to be more efficient. With Bankingly’s AI, microservices architecture, integration tools, and security stack, they can automate manual tasks such as basic customer service, fraud detection, monitoring, and marketing and create customized products.
- Greater market reach: Banks may get more customers that are not using or cannot do so with their current model. Alliances allow them to compete for pieces previously out of their grasp, such as the millions of unbanked and underbanked people in rural, low-income, remote areas. They can expand to other towns and cities and offer accounts with small deposits and micro loans. As a result, banks can grow their customer base and establish virtual branches wherever their clients are found.
- Access: Banks gain access to the latest innovations, tech talent, IP, and insights to stay ahead. Tech companies work in different domains, sectors, and countries in product development, cloud infrastructure and an ecosystem of collaborators – this gives them a wealth of skills that be applied across. This can be invaluable to banks looking at digital transformation.
- Specialization: Fintech firms, such as Bankingly, have the edge over traditional big tech, small offshore outsourcing businesses that may only take large projects or lack financial domain expertise. Many are inexperienced in rural finance and are hesitant to enter the market. Banks can benefit from their presence and local knowledge by collaborating with local tech firms. Best of local and global.
- Go to market faster: They can specialize and bring new products ad services to market quicker. Typically, what would take years and a large amount of money can now be completed at a fraction.
For example, Bankingly’s digital/mobile/cloud-first technology may be implemented in 8 weeks – much faster and less expensive than other options or if the bank did it in-house. As a result, they go to market, improve, evaluate, and move faster.
Overall, technology partnerships are critical for financial institutions to adapt and succeed. Have you ever had a partnership experience? Please share your story with Bankingly, comment, tweet, or collaborate with us!