THE VAST majority of UK banks would consider a new fintech partnership in order to meet customer needs, new research has found.
According to a new survey from credit card transaction specialist Fraedom, 84 per cent of banks are open to the idea of a fintech partnership.
Top among their concerns is bolstering their online security, with 60 per cent of banks saying that this is a priority for them.
More than a third (36 per cent) of banks said that they could use fintech partnerships to improve customer experience, while a further 36 per cent said that a fintech partnership could be used to help them achieve real-time visibility.
“A lack of in-house capabilities is driving banks to partner with fintechs to answer the growing demands of their customers,” said Kyle Ferguson, chief executive of Fraedom.
“Banks are beginning to realise that these partnerships allow them to overcome shortcomings in their internal skills base and benefit from innovative technology systems without having to invest time, money and resources in their development.”
However, 38 per cent of banks said that they would prefer to focus on in-house development, rather than pursuing a new fintech partnership. A further 40 per cent of banks are concerned about the security risks that may arise from a fintech tie-in, as well as the challenge of integrating legacy technology.
“Many of the barriers preventing banks from partnering with fintechs are about perception and, in fact, partnerships can help banks to efficiently overcome many of these challenges,” added Ferguson.
“Specifically, fintechs have the knowledge and technology systems in place to help banks mitigate a lack of capabilities in-house and low budgets, as solutions can increasingly be implemented out of box, without the need for internal development. Additionally, these solutions cater not just for the bank’s current requirements but also for their future roadmap.”