Cooperation instead of confrontation: This is the current motto for fintechs, according to a new study. While these "young guns" have the potential to disrupt the financial market, they are nevertheless dependent on cooperation with established financial service providers. Otherwise, failure threatens, according to the World Fintech Report.
The study was conducted by IT consultancy Capgemini in collaboration with LinkedIn and the banking and insurance network Efma. Based on the findings, the authors predict that fintech startups have little chance of success unless they partner with established financial professionals.
The crucial point, or rather the decisive factor, is the considerable effort required for sales. Building a solid customer base is no easy task in the financial sector. Especially when it comes to trust, banks have a decisive advantage over young, up-and-coming companies.
“Financial institutions must respect the culture of fintechs”
Klaus-Georg Meyer, Head of Business & Technology Consulting Financial Services Germany at Capgemini, says:
"Three-quarters of fintechs see their primary business goal as collaborating with traditional financial firms. Therefore, it is essential that both open their business models to cooperation with each other."
And Vincent Bastid, Secretary General at Efma, adds:
"For a successful partnership, both sides must remain open-minded and focused on collaboration. Financial institutions must respect the culture of fintechs so that they don't lose their agility—their most important asset for joint projects. Selecting the fintech with which to collaborate best is also a major challenge."
Even if there is certainly still a lot to improve in terms of cooperation, the financing situation for Fintechs is at least looking very good: In 2017, in Germany, compared to the previous year, Increase in investment volume in fintechs from 166% to a total of 1.21 billion dollars.
