Marriage of Convenience

FROM DISRUPTERS TO PARTNERS, THE FINTECH-BANK RELATIONSHIP HAS COME A LONG WAY. WHAT IS THE NEXT LEVEL OF THIS PARTNERSHIP?

- ANAND ADHIKARI

A decade ago, the entry of Fintechs in the fast-growing financial services space was a shocker for traditional banks. Bankers were worried that at some stage in the future, Fintechs would eat their lunch. Be it payments, software as a service, or lending, the new age start-ups in the financial services space went all out with innovative models in underbanked and unbanked areas to woo customers. But banks, too, followed with their digitisation drives, pushing Fintechs back. Regulators also stepped in to fill the gaps and encourage innovations. For instance, the unified payment interface-based platform hit mobile wallet players hard. On the other side, the entry of Techfins such as Google Pay, Amazon Pay and WhatsApp started changing the rules of the games. While the tug of war still continues, the jury is still out on the future of traditional banks.

A Win-win For Both

A partnership model has been evolving steadily between Fintechs and banks in the past few years. Fintechs bring in the perspective from the customer standpoint, which sometimes banks may not be able to because of multiple functions.

“Fintechs need banks as much as banks need Fintechs. We look at it as a collaborative partnership. We work in conjunction with Fintechs to deliver superior customer experience,” says Shalini Warrier, Executive Director at Aluva, Kerala-headquartered Federal Bank.