While financial institutions of all sizes may choose to participate in the Fintech space as providers of services, the vast majority of Fintech interaction will be as consumers of the platforms. Working with a Fintech can provide challenges, particularly for community institutions.
Here are the questions to ask as you consider engaging with a Fintech provider:
- Is our current Vendor Management model flexible enough to allow us to work with a Fintech or does it push us toward more established providers?
- How skilled are we at managing partnerships?
- What track record does the Fintech have in working with similar sized institutions?
- Do we have enough technical expertise in-house to understand how everything works together? If not, do we have a partner lined up to assist with the evaluation and beyond?
- Does the institution have a comprehensive digital strategy into which the Fintech fits?
Of all the questions, the last is the most important. Fintechs, at their most basic level, can become shiny objects that can distract banks from their strategic objectives. While it doesn’t have to be overly elegant, a road map that looks to your future state is vital. Keep that road map updated as your strategy evolves and technology advances.
The financial institution considering Fintech should always remember that they are building a competitive product solution. While Fintech can be an enabler, it comes into play after the FI’s road map for competitive solutions is accepted and being implemented.
Profit Resources specializes in identifying profitability improvement areas for financial institutions through revenue growth, cost control, streamlining processes, and effective use of technology. Contact us to learn more about our personalized approach to propel growth and improve profitability.