And collaboration means BaaS consumers don’t need to jump through hoops to acquire official bank status. Their chartered bank partners can provide compliant deposit management and insurance, which leaves the fintech company free to concentrate on trailblazing customer experience.
Add in the obvious fact that banks bring finance to the party, it’s not hard to see what startups have to gain from forging strategic partnerships.
The partnership gap
So, in theory, there are plenty of sound reasons for financial institutions and fintechs to cultivate strong relationships. The reality is not so rosy. As we know, banks are happy to finance startups, but persuading them to allocate more resources to collaborate is a trickier prospect.
For tech companies, embedding white label banking services into a product to create seamless customer experiences is obviously a great idea, but working through risk and compliance requirements is daunting, to say the least.
To a large extent, this is a problem of communication: startups don’t speak bank, and banks don’t speak startup.
The partnership bridge
A symbiotic partnership between the two requires a common vocabulary and increased empathy between two groups that look and feel so different from one another.
Today, more banks see customer-facing fintech companies as potential partners and it’s exciting to watch this change.
Susan is Head of Product at
. She leads the design and development of Open Platform’s groundbreaking suite of white-label, banking-as-a-service APIs in the U.S. Susan is a payment, digital commerce and financial services expert, working in the financial services sector for more than 25 years.