EBPP: Putting the “Tech” into Fintech

As the business climate for financial institutions continues to be more challenging than ever, the many opportunities and advantages of digital banking are becoming more evident. While a few FI’s are moving beyond legacy branch-focused strategies by offering advanced payments solutions to their valued commercial clients, the majority of FIs are getting left behind and losing clients to a new generation of FinTechs. Many FIs are just now addressing the conservative internal culture that has often challenged the adoption of new technologies which have given rise to FinTechs that are filling a need that many banks are not able to provide. However, many banks are beginning to realize the benefits made possible by partnering with technology vendors to compete with the growing FinTech competition.

FinTech Firms Come in Different Forms

An increasing numbers of banks are at a stage in their development where they should assess their place in their markets.

Some of the questions they are asking include: Are they a traditional bank? Do they want to be a leader in technology, like a FinTech firm? Do they want to adopt something in the middle, and be a hybrid financial provider?

After evaluating their options, FIs can then better assess how they might be better able to serve their customers – and perhaps – be a disruptor in their market like FinTech firms. The difference can be that FinTech firms are often rooted in a tech startup mindset that includes offering only very specific functionality and decoupling from existing digital banking suites. Banks, on the other hand, have an opportunity to be a stable, well-financed technology disruptor when working with appropriate partner(s). By partnering with technology providers, Banks can combine their financial strength and market power with the innovation and speed of high-tech product companies.

The Importance of Taking a Multi-Layered Approach to FinTech

Traditionally, banks use technology providers for their core banking systems, however, these systems address only the basic cash management and digital banking needs of their commercial clients.

From a long-held obsession with serving customers based on branch banking, to online and digital banking variants, banks are poised to move beyond the foundation of traditional core banking products and services, typically seen as part of front-office solutions. Many banks are branching out (both literally and figuratively) to include such areas as payments, financial planning, investments, wealth management, business banking, and other capabilities.

Such a unified approach offers comprehensive banking capabilities and is a key reason why technology – and FinTech’s role in elevating automation in banking – has become the foundation for innovation for both banking customers and enlightened FIs alike.

While technology is naturally at the core of FinTech, its true value is more than merely features. It can offer high-levels of functionality, process improvements, and subject matter expertise, layered into cohesive solution suites. For many FIs, the fusion of these elements remains a work-in-process, albeit with much potential.

There’s a Void in Corporate Banking Technology and Innovation

Even though FinTech startups continue to focus primarily on retail banking (with a little over six-in-ten focusing on the retail banking market segment[1]), only about 11% are developing solutions for large corporate banking customers.  Banks have an opportunity to fill this void by becoming a FinTech partner with corporate banking and treasury functions.

By partnering with select technology firms, banks can better innovate and reduce time-to-market while increasing speed-of-execution, settlement speed and quality, and overall profitability.

Leveraging Tech to Deliver an Outstanding Banking Customer Experience

Many banks are realizing that a new type of FinTech business model requires both technology prowess – and the kind of touch that only banks that truly understand their banking customers’ needs.

First and foremost, banks are unique in that they have years of experience and a reputation for understanding and addressing customers’ needs. Banks also have a long history of seeking out and understanding their customers’ needs, something startup FinTech firms cannot generally offer across a broad spectrum of products and services.

While not true in all cases, many banks have built (or are building) strong brand awareness, particularly those that can include a personal touch and innovative technology. They can offer a wide range of products and expertise to their clientele that are unmatched by startup FinTech firms that only focus on limited functionality.


Banks that are expanding their horizons to include FinTech-like capabilities are placing themselves in a strong competitive position.

And smart institutions are increasingly partnering with strong, stable, and innovative tech partners to ensure that their solutions offer the features, quality, and scalability demanded by their customers.

Unlike some one-trick-pony tech startups, tech-savvy banks have the opportunity to offer a broad array of most in-demand solutions. Banks are unique in that they can offer both the spirit – and the letter – of banking customers’ wants, needs, and expectations.

Read our follow-up blog: Leveraging a Fully Integrated End-to-End EBPP Solution

[1] https://www.mckinsey.com/industries/financial-services/our-insights/cutting-through-the-noise-around-financial-technology

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