Once pitted against each other, fintechs and more traditional banks are now closely intertwined. Today, they are developing products, solving problems together and creating new technologies in a cooperative way.
Businesses like Mastercard play an important role building partnerships with emerging and established fintechs, helping to drive benefits across the financial services sector. The global payments giant invests in new technology that makes connecting buyers and sellers more efficient. This collaborative approach means fintechs benefit from its expertise, insights and solutions to build scalable businesses with the potential to lead their categories.
If you have opened your banking app recently to find new features, chances are they are the result of a partnership between a bank and a fintech. Indeed, research by the World Bank shows incumbents have become important customers of fintechs as banks pursue digital transformation strategies. This is just one dimension of the increasingly close relationship between these parties.
“There is a global trend of traditional banks and fintech firms collaborating to innovate and co-deliver fintech products,” explains Dan Martin, Vice President, Head of Digital Partnerships at Mastercard.
These partnerships allow banks to shortcut their innovation cycles to deliver new services to customers faster and replace old technology with newer, digital tools. Fintechs also benefit from the ability to market their services to bank customers, which helps to reduce newer firms’ marketing costs and grow sales.