Seven Questions to Ponder for Successful Fintech Partnerships

As innovation transforms financial services, community banks continue to explore new ways to leverage technology to meet customers’ needs. Given market dynamics and internal resource demands, fintech partnerships increasingly offer the key to unlocking community bank innovation.

Finding the right partner is critical to powering your business plans and supporting your organizational goals. But how do you determine if a provider is “the one”? The following seven questions provide a roadmap for entering into a new fintech relationship.

1. Does our innovation strategy and goals align with the fintech’s mission and offerings? Don’t be distracted by the litany of available solutions that don’t address your business objectives. Focus on potential partners that can help you solve your problems and how their solutions will help you achieve your desired results.

2. How experienced and knowledgeable is the fintech’s leadership? As Mike Ewing, vice chairman and CEO at $250 million-asset Oak View National Bank, in Warrenton, Va., recently pointed out: It’s important to evaluate the leadership of your potential partner. Seek a partner that understands your challenges and vision and has a vision for the future of his or her company as well. With the right leadership—and by extension, supporting team—you’ll have optimal opportunity for success.

3. What stage of maturity is the fintech? Startups, young market entrants and established financial services powerhouses each have their own strengths and weaknesses. Determine which aligns best with your strategy, needs and timing.

4. What level of effort is required for integration? Ask questions to help determine your integration timeline. Is the solution turnkey? Will it need to tap your core and, if so, has your core signed off on that integration already or will that require additional time and cost? The goal is to walk into the agreement with realistic expectations of the timeline from sign-off to product launch.

5. Does integration allow for scalability? So the solution fits in well with your current market needs, but how does it align with your products and services needs over the next five or 10 years? Look for partners and solutions that offer scalability so you can adjust the product as your needs and goals change.

6. What impact will the product have on your customers and their experiences? Seek partner solutions that meet customer needs with minimal disruption or required behavior changes and speak to the audience you plan to target in the future.

7. What’s your ROI? With innovation, return on investment is not always measured in dollars and cents. Know what success looks like for your community bank before entering into any partnership, and understand how you are going to measure it in collaboration with your fintech partner to get the desired results.

Selecting the right fintech is no light load. ICBA has programs to help vet potential partners like the ThinkTECH Network, which offers a curated, online directory of technology companies focused on the community banking space, and our ICBA ThinkTECH Accelerator program, which identifies early-stage fintechs with solutions tailored for community banks like yours. Find out more about both of these initiatives at icba.org/solutions/thinktech.  

Remember, it’s not always the rabbit that wins the race. Take time to explore your options and identify the right partner. After all, this strategic partnering is essential to expanding your high-tech, high-touch services efficiently and effectively long into the future.

Kevin Tweddle is chief operating officer of the ICBA Services Network.