VOICE OF THE MEMBERS

Bank + Fintech: The secret to a successful collaboration

InterviewING Bank + Cbot

InterviewStandard Chartered Bank + PayKey

InterviewNational Bank of Canada + Flinks

2 Bank + Fintech: The secret to a successful collaboration

Contents

POINT OF VIEW

06 | The Bank + Fintech relationship06 | The challenges of an innovative culture07 | Pioneering approaches08 | How to accelerate the journey to innovation and digital

transformation

INTERVIEW

NATIONAL BANK OF CANADA + FLINKS

STANDARD CHARTERED BANK + PAYKEY

ING BANK + CBOT

10 | Canadian cooperation invests in mentorshipand guidance

13 | Innovation at the heart of social banking

16 | AI enables instant messaging with banks

09 | Making collaboration work

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The Bank + Fintech relationship By Carlo Giugovaz, Senior advisor at Efma and founder and CEO of Supernovae Labs

POINT OF VIEW

Over recent years it has become evident that startups embody the core principles of innovation that drive commercial success. They embrace risk-taking and failure, while rewarding success. They are agile and focused on customer needs, enabling them to immediately adjust to meet market demand. Due to their small size, they can think big.

However, because they are small, scalability can often be a challenge. That’s why they are increasingly relying on the scale and customer base of big banks in order to succeed.

Here I outline the challenges and opportunities facing banks and fintechs when it comes to partnering for success and provide five top tips to ensure a happy future.

The challenges of an innovative cultureThe ongoing innovative culture of the financial services industry presents many challenges to both fintech startups and traditional banks.

• Fintech startups that are specialists in their field may have the idea and vision to set up a strategy but often do have the customer-base or financial means to realize it. In order to succeed, the fintech must collaborate with banks, who do have the customer-base, scale financial means, and strategize on how to become an asset to them.

• Traditional banks are facing increasing challenges due to their legacy IT systems and outdated cultures. As financial institutions, these banks have developed a strong heritage of procedures not only in terms of workflow, compliance, and products but also in their corporate culture. It is a difficult task to bring down the walls of tradition and create an environment that is open to novelty and innovation; it requires management to introduce a brand-new set of beliefs.

Branches are at the core of traditional banks. Although digital transformation is changing the way imagine many services, financial

The current evolution of banks sees them embrace an omnichannel content strategy and either become a spin-off of the existing bank or start from scratch and buy a new bank. - Carlo Giugovaz, Senior advisor at Efma and founder and CEO of Supernovae Labs

4 Bank + Fintech: The secret to a successful collaboration

institutions are not yet ready to overcome this. Investment needs to be made into the logic and software of traditional banks.

• Even strong market innovators such as Chinese financial institutions are encountering innovation difficulties. Fintechs are set to slowly become the banks of the future by offering business to consumer (B2C) models. Financial technology is also being integrated in existing institutions and enabling them to become ‘new’ banks that target a younger audience than before. To keep up with fintechs, financial institutions are increasing their range of offerings, breaking away from a more traditional past that only offered the basic requirements of a bank.

The current evolution of banks sees them embrace an omnichannel content strategy and either become a spin-off of the existing bank or start from scratch and buy a new bank.

Pioneering approaches There are a number of examples of leading banks that have established an innovative culture within their organizations thanks to their partnerships with fintechs. While they all take a slightly different approach, effective collaboration is undoubtedly a key attribute to success.

The full content of this report is exclusively reserved for Efma member institutions. If you wish to know more about gaining full access

to exclusive content, as well as other benefits, go to www.efma.com/joinefma

or contact membership@efma.com

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InterviewNational Bank of Canada + Flinks

InterviewStandard CharteredBank + PayKey

InterviewING Bank + Cbot

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P.13

P.16

INTERVIEW

Making collaboration workAlthough fintechs have raised nearly US$110 billion since 2009, most are likely to fail if they do not build an effective partnership ecosystem. That’s according to the recent World FinTech Report from Capgemini and LinkedIn, in collaboration with Efma.

“With more than 75% of fintech firms identifying their primary business objective as collaborating with traditional firms, it is essential that both fintechs and traditional firms transform their business models by collaborating to drive innovation while retaining customer trust,” said Anirban Bose, the head of Capgemini’s Financial Services Global Strategic Business Unit and Member of the Group Executive Board. “Without an agile and committed collaboration partner, both traditional and fintech firms risk failure.”

In the pages that follow we speak to leading banks and the fintechs they have collaborated with to understand what makes their relationships successful.

The full content of this report is exclusively reserved for Efma member institutions. If you wish to know more about gaining full access

to exclusive content, as well as other benefits, go to www.efma.com/joinefma

or contact membership@efma.com