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LATEST THINKING


WHERE FINTECH LENDING
WILL LAND

European banks and fintechs can leverage the best
of both by working together.

OVERVIEW

European bank leaders initially saw financial technology companies (fintechs) as a challenge. Now they’re starting to see things differently. Traditional bankers are becoming increasingly open to the idea of collaborating with fintechs of all types, to improve their own offerings and accelerate growth. The timing is right. As the lending fintech world enters a more mature phase, fintech leaders are also looking beyond their own organizational boundaries for new ways to better the odds of their long-term survival and success.

Banks stand to gain capabilities in five distinct areas via fintech collaboration: customer analytics, comprehensive credit scoring, providing a fully digital customer journey, integrating digital platforms and portfolio management. To combine the strengths of traditional banking with fintech’s innovative solutions effectively, however, they need a purposeful strategy.


COLLABORATION
BETWEEN BANKS &
FINTECHS CAN
LEAD TO BETTER
OUTCOMES BY
HELPING EACH
DEVELOP WAYS TO
EVOLVE

THE BEST OF BOTH WORLDS

Collaborative strategies can lead to better outcomes for banks and fintechs by helping each develop productive ways to evolve, by combining the strengths of traditional banking with the innovative solutions offered by fintech lending.

BANKS

Banks

Competition with fintechs: Puts typically two to three percent of bank revenue at risk—from lower loan origination, lower net income and fewer customers acquired.

Collaboration with fintechs: Could give banks a three to five percent revenue increase—through enhanced customer acquisition, more fee-based revenues, better pricing accuracy and lower cost of risk.

FINTECHS

Fintechs

Competition with banks: Prolongs difficulties in scaling up and becoming profitable.

Collaboration with banks: Would improve fintech financial viability, attract more clients and, in some cases, obtain guarantees for deposits.



AUTHORS

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