online security revealed to be a priority for almost two-thirds of banks
More than three-quarters (84%) of banks are thinking about new
fintech partnerships in 2021 in a bid to improve customer experience (36%) and
achieve real-time visibility (36%). The research, commissioned by fintech
provider Fraedom, also discovered that other factors inspiring banks to partner with
fintechs be more effective cash and card management, accelerating digital
transformation and cost savings.
“A insufficient in-house capabilities is driving banks to partner with
fintechs to answer the growing demands of the customers. Banks are beginning
to realise that these partnerships allow them to overcome shortcomings in their
internal skills base and take advantage of innovative technology systems without
having to invest time, money and resources in their development,” commented
Kyle Ferguson, CEO, Fraedom.
The report also says strengthening online security is a
top business priority for almost two-thirds (60%) of banks considering fintech
partnerships. This is followed by ensuring the right skills are in place to be
successful, upgrading operational systems and increasing profits.
While these numbers indicate a growing appetite for partnership,
they also reveal several perceived barriers remain. Concerns about security
(40%) along with a focus on in-house development (38%) remain fairly widespread. Banks
also considered the challenge of integrating with legacy technology and budget
to be among the barriers of partnering with fintechs.
“Many from the barriers preventing banks from partnering with
fintechs are about perception and, in fact, partnerships can help banks to
efficiently overcome many of these challenges,” added Ferguson. “Specifically,
fintechs possess the knowledge and technology systems in position to help banks
mitigate deficiencies in capabilities in-house and low budgets, as solutions can
increasingly be implemented out of box, without the need for internal
development. Additionally, these solutions cater not just for the bank's
current requirements but also for their future roadmap.”