FinTech-Bank Cooperation in Germany: Quo vadis?
Still, the traditional banks and savings banks have tens of millions of customers and income though they also have paper-based, inconvenience processes and highly outdated technologies. FinTechs, on the other hand, have only a few customers, so far hardly any revenues or profits worth mentioning, and usually no banking license, but new customer-friendly processes and products, built with the latest technologies.
Given the security thinking, the technical and procedural legacy and the increasing regulatory requirements, it is difficult for traditional banks to adapt to ever-changing conditions and customer behavior. In particular the generation "Smartphone" expects all current and new banking services, such as peer-to-peer, crowd or instant loans, easy, convenient, fast and mobile at all times. These expectations are mainly met by FinTechs, such as the credit markets “kapilendo” and “Smava”, robo advisory startups such as “niiio” or the mobile bank “N26” (formerly Number 26).
It is interesting that many FinTechs can offer their customer-friendly financial services and products only with a bank license, which they do not have at first, and consequently need a bank as a partner. For example, a number of collaborations have been established between FinTechs and banks, which are usually only known in the specialist world. The crowd finance market place kapilendo cooperates with Fidor Bank, the robo advisory startup growney cooperates with Sutor Bank and N26 (formerly Number 26) with wirecard. The example N26 shows that as soon as Number26 is grown enough, an own banking license is purchased, a repositioning takes place on the market as N26 and the partnership with wirecard is cancelled. A stress field for the cooperation partners.
That is all around. In the meantime, no traditional bank manager or savings bank board member can escape the issue of FinTech. At the same time, customer acquisition of FinTechs is very time-consuming and cost-intensive. The FinTech CEOs are wondering how they can win customers faster and generate sustainable returns in order to remain on the market with a view to the large traditional banks and savings banks.
So what the banks have missing the FinTechs and vice versa. The question arises: how do they approach each other, given the stress field?
Because no one knows a success recipe a variety of activities in the market can be observed.
Whether it is the Hackathon of Deutsche Bank, Bankathon of figo, symbioticon of the Savings Banks, Startup Garage of Comdirect, direct investment in FinTechs of the mainincubator or the joint venture of Nord/LB and DvH Ventures with the aim of investing in Fintech startups – every form of cooperation is tried out. First cooperation results can be seen in applications such as video identification, Personal Finance Management and robo advisory. More and more traditional banks offer such services to their customers, whose origin comes from FinTechs. According to TECHFLUENCE and FinTech Forum, more than a billion euros were invested in FinTech and FinTech cooperation in 2015 alone.
The range of cooperation forms is wide, the investments in FinTech and FinTech cooperation are enormous and no one knows what success will bring. Meanwhile, the traditional banks and savings banks are now undergoing a digital transformation driven by the innovative power and new, customer-friendly financial offers from FinTechs.
Thus, the future of FinTech-Bank cooperation is still uncertain.
FrankSchwabSpeaks.com
Article in German: