What is a Fintech-Bank Partnership?
What is a Fintech-Bank partnership?
Increasingly brands and fintech pursue partnerships with banks to offer their own loan, deposit and payment products. Fintech-Bank partnerships are the future, but despite the obvious advantages and many successful partnerships out there, the process remains a mystery to many. Fintech (and banks) may be losing out.
Google recently announced that they have partnered with eight banks and credit unions on a future checking account. But long before Google, for at least 10 years or more, there has been a steady stream of fintech-bank partnerships. Banks powering fintech platforms to build their products and apps on top of the bank’s regulated charter.
The advantages of such a partnership go both ways. For banks, it could include fee income, access to emerging technology and innovative new ways of reaching broader markets. For a fintech, partnering with a bank helps fuel growth, could reduce time to market and generally far outstrip what they could build alone.
However, it is not just selling a piece of technology to a bank. These are sophisticated relationships, with the fintech becoming an agent of the bank, having to comply with the same regulations and standards as the bank’s own departments and products, inclusive of Unfair, Deceptive or Abusive Acts or Practices (UDAAP), Truth in Lending, Truth in Savings, Anti-Money Laundering (AML) and Know-Your-Customer (KYC).
Interested to find out more? Do not know which bank will be the right partner for you? To learn more about how you can benefit from a fintech-bank partnership, inclusive of how to be prepared and what to expect, message me directly or tune in to the live LendIt Fintech USA 2020 session next week. I will be interviewing two of the most knowledgeable people in the fintech-bank partnership space, David Tilis and Todd Plumley:
The Ins and Outs of a Bank-Fintech Partnership
For those who missed the LendIt session, the recording is now available below:
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