FinTech Collaboration: The view from CPI Europe Summit

This week payments professionals from across Europe came together for the CPI European Summit 2018.

This week payments professionals from across Europe (and beyond) came together for the CPI European Summit 2018.

I was honoured to moderate two round table discussions on FinTech partnerships, where contributors from banks, schemes and FinTechs all shared some fascinating perspectives on the state of collaboration today and what they’d like to see moving forward.

For those who couldn’t join, here are 3 key takeaways from the sessions:

1: Main focus: Customer-centricity is increasingly on the agenda in European payments

Banks and schemes recognise the value FinTech partners can bring to the table in terms of serving very specific client pain points, and thereby help them gain a competitive edge.

Yet there is a move by FinTechs away from partnership exclusivity to bank agnosticism that promotes a more holistic approach to optimizing B2B payments, and which will be increasingly enabled by PSD2/Open Banking regulation.

In response, banks will need to ensure they are not just product-centric but positioned as trusted, solutions-led consultants to their corporate clients.

2: Major pain point: Siloes within the players and across the ecosystem continue to be a frustration for everyone when it comes to establishing partnerships and taking solutions to market

On the FinTechs’ side, access to and relationship building with key decision-makers is a long, costly and bureaucratic process, that can be majorly frustrated if their key contact gets displaced, or later, with snail-paced IT integration.

Meanwhile, executives at the incumbents only have so many hours in their day too and establishing and communicating partnerships across siloed product teams / departments is no picnic for them either! Banks would like to see FinTechs be less Pidgeon-holed to Product, and rather be a focus shared across the business. In the meantime, their big ask from FinTech partners is to ensure that they can support harmonisation across legacy systems / existing products and bring a solution that can be taken to market quickly.

It was also suggested that payment processors could be doing much more to ensure they are ready to adapt and scale to the increasing number of FinTechs that now wish to integrate to their 3753systems.

All in all, players need to work on greater harmonisation and there was a call for schemes to take a greater role in alleviating the legwork of identifying / credentialing the right partners.

3: Changing dynamics: Players starting to converge on agility, risk and reputation

While it was agreed that incumbent players are nowhere near as agile as they’d like to be, participants from some of the leading banks were positive that internal management styles were starting to speed up decision-making, with the implementation of SCRUM and ‘fail fast’ approaches.

FinTechs believe they are ‘growing up’ and building their brands to be respected and trusted providers, with growing capabilities around compliance. The FinTechs participating in the round table reported that they are increasingly being called upon by their bank partners to take on risk and trusted to own more elements of the customer relationship.

Within this changing dynamic, all parties agreed more needs to be done to ensure clarity around risk and data sharing.

The round table demonstrated clear intention from both incumbents and FinTechs to collaborate in order to achieve common goals. However, there are some key considerations to take into account in order to ensure a successful partnership, as suggested by our earlier blog posts []. These challenges/pain points were also acknowledged by the panel participants and we look forward to seeing how they fare in establishing successful partnerships in the future.