A clear majority of global retail and corporate banks are keen to strike up partnerships with fintech players, according to research from consultancy IDC Financial Insights and digital bank SAP.
In their poll of 265 institutions in 24 countries, the organisations found that six out of 10 would happily team up with fintech start-ups to gain strategic advantages.
Meanwhile, one in three (34%) would actively collaborate on joint ventures with fintech firms, and a quarter would be prepared to acquire one.
The poll reveals that banking leaders are particularly focused on gearing their groups’ resources towards initiatives around digital transformation (or ‘DX’, for short).
Within that context, fintech partnerships are viewed in certain regions as crucial to brushing up key capabilities.
In Europe, the Middle East and Africa (EMEA), for example, customer-centricity is driving DX investment, with 57% of banks citing improved customer experience as an outcome of their DX projects.
However, less than 25% of EMEA banks have strategic, enterprise-wide approaches to DX in place.
By contrast, in Asia-Pacific, banks are moving towards advanced, strategic DX approaches, with 29% running enterprise-wide schemes – higher than the global average of 28%.
However, there is a lighter emphasis in the region on improving customer experiences, with 41% citing it as a priority compared with the global average of 50%.
SAP global head of financial services Rob Hetherington explained: “The relationship between banks and [fintech] start-ups is an interesting and nuanced one.
“Banks are in the midst of digital transformation, looking for ways to speed their time to market and to deliver new value or services to customers.
“Start-ups, on the other hand, are mobile, agile and built solely for the customer. Yet they lack the regulatory know-how and customer confidence that large, global banks have.”
On that basis, Hetherington noted: “Both have something the other wants, and I anticipate that we’ll witness far greater collaboration, integration and – in some instances – acquisitions happening in the next year.”
Jerry Silva, research director at IDC Financial Insights, added: “DX at any bank always begins with an honest self-evaluation, involving many questions that touch upon evolving customer demands, strengths, weaknesses and the competitor landscape.
“From there, banks must then invest in a full DX by building board-level involvement, a leadership structure for organisation-wide transformation and, finally, an infrastructure that supports partnerships.”