Best Types of FinTech Companies to Partner With
Financial institutions are under pressure to succeed in the digital age. They need to partner with the best fintech companies out there to keep up. Currently, nearly 90% of financial institutions consider fintech partnerships crucial to success. But with so many different options, how can financial institutions be sure which ones are right for them?
This blog post will discuss the best types of fintech companies to partner with and explain why each one is a good fit for financial institutions!
1. Digital Account Onboarding
One of the best types of fintech companies for financial institutions to partner with is digital account onboarding providers. They can help speed up opening new accounts and make it more convenient for customers. Currently, nearly 40% of customers are still required to visit an institution’s branch to sign up for an account, while about 45% are required to print out and physically sign documents. In addition, digital account onboarding providers often have fraud detection capabilities that can protect financial institutions from losses.
2. Transaction Processing
Another type of fintech company that financial institutions should partner with is transaction processing companies. They can help streamline the process of payments and transactions. Transaction processing companies often have advanced security features to protect financial institutions from fraud and data breaches.
3. Data Analytics
Data analytics is another area where financial institutions can benefit from partnering with fintech companies. Data analytics can help financial institutions make better decisions about where to invest their money and how to grow their businesses. Fintech companies specializing in data analytics can also help financial institutions comply with regulations and better understand their customers.
4. Artificial Intelligence
The use of A.I. has been rising over the last several years and for a good reason. Artificial intelligence can help financial institutions automate tasks and make better decisions, such as improving operations, customer experience, and employee satisfaction. A recent survey indicates about 80% of banks are aware of the benefits of A.I., and about 75% with assets of $100 billion are implementing A.I. strategies.
5. Faster Payments
One of the best fintech companies for financial institutions to partner with is more rapid payments providers. They can help speed up the process of payments and transactions. Real-time payments are quickly becoming a priority across the country, and growth doesn’t appear to be slowing down. Real-time payments volume is increasing year-over-year as consumers expect and demand real-time capabilities.
6. Digital Loans
Digital loan providers can help streamline getting a loan. Financial institutions must invest in technology that allows consumers to use mobile devices for loan applications. Institutions can also use cloud computing to increase speed, improve cost-effectiveness and scalability, and optimize systems integration. Digital loan providers often have lower interest rates and fees, saving customers money. Digital loans can be processed faster than traditional loans, making them more convenient for customers.
Cyberattacks are becoming more common and more sophisticated. Fintech companies specializing in cybersecurity can help financial institutions protect their data and systems from attacks. Increased cybercrime results in increased costs for banks as they feel the pressure to reimburse defrauded customers. Most consumers expect their bank to cover the costs of successful scams. Over half of the online consumers receive scam attempts via SMS at least once per week.
8. Honorable Mentions
Financial institutions should also consider partnering with fintech companies specializing in digital currencies, blockchain, and cloud-based banking solutions. These companies can help financial institutions stay ahead of the curve and provide innovative solutions to their customers. Digital currencies, blockchain, and cloud-based banking are all emerging technologies that have the potential to revolutionize the financial industry.
Aligning an Institution’s Mission with Its Fintech Strategy
Collaborating with a fintech company will benefit banks with innovation without costly in-house investments. However, an institution must understand the risks and how failing to align strategy with its mission creates more risk.
An institution needs to partner with a fintech company that supports its objectives. So, for example, it won’t make sense for a fintech to partner with a blockchain if its goal is to be a leader in mortgage originations. Institutions must assess the risks and opportunities to determine if the potential investment costs align with their mission. It must know how much risk exists and if it is within the institution’s risk tolerance. Financial institutions should partner with fintech companies that offer innovative solutions and can help them differentiate from the competition.