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For many financial institutions today, going digital has the potential to unlock new market segments, streamline operations, cut risks and greatly improve customer relations. But for institutions considering this proposition, size matters.
Larger institutions tend to have the resources to source and apply new financial technology (fintech) or, if those resources are not available in-house, to enlist partners that can help them improve internal processes and deliver innovative offerings. Several large financial institutions in emerging markets — including BBVA, Diamond Trust Bank, ICICI and Stanbic Bank, to name a few — have been sponsoring incubators and partnering with fintech startups, often with a view to acquiring or “acqui-hiring” them to develop new capacities. A recent study by CFI-IIF points to the numerous benefits of fintech/bank partnerships, and another PwC study estimates that over 80 percent of the world’s financial services firms are expecting to increase fintech partnerships in the next three to five years.