Collaboration between Banks and Fintechs: The Future of Financial Services
6th Jun 2023
By RING App Founder & CEO, Ranvir Singh
The relationship between banks and fintechs has been a topic of discussion for some time now. While some perceive the two as competitors, the truth is that collaboration between these two sectors is the way forward. This is not just a trend, it is an undisputed truth.
From a founder & CEO perspective, I can affirmatively say that collaboration is key. Gone are the days when banks and fintechs operated in silos, trying to outcompete each other. However, collaboration of this sort has not fully played out in commercial models just yet. The market is driven by multiple factors, and banks and fintechs come in many shapes and sizes. Customer ownership is a big factor, as it allows fintechs to charge more for the value they bring to the table.
Banks have started to realize that fintechs bring expertise in data and customer data analysis, which can help them better understand their customers, underwrite loans, and create the right offerings. This has led to many fintechs becoming profitable. Some, like RING, have been profitable for the last three years.
The economic structures have evolved to a point where collaboration between banks and fintechs is essential for growth and success. This is a model that benefits everyone involved, including banks, fintechs, and most importantly, the customer.
I would say the collaboration between banks and fintechs is moving in the right direction. While there are still challenges to overcome, the success of the industry depends on the efficiency of these two institutions working together.
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