The top reason financial institutions partner with fintechs? Slashing operational costs.
A survey of banking execs found that cost cutting is one of the most attractive aspects of working with fintechs: They’re looking for partnerships that can make time-consuming and labor-intensive processes more efficient.
New research from Finastra reveals that most global banks plan to connect with an average of three fintechs over the next year and a half, and that their main motivation is reducing costs.
The research is based on 783 interviews that analysis firm East & Partners conducted with execs at banks around the world.
It found that the top motivation for integrating fintech solutions was reducing operational costs, followed by deploying new technology with greater ease, and then aligning more closely with evolving compliance needs.
That research aligns with our own anecdotes: In the last several months, Insights Distilled has featured dozens of fintech relationships that help banks cut costs. For example, KeyBank has turned to fraud-fighting fintech Quavo to both increase its efficiency and reduce its losses, JPMorgan used Cleareye.ai to “massively improve efficiency” in trade finance document review, and Nordic bank DNB has automated more than half of its chat traffic using Boost AI’s conversational chat platform.
It’s clear that these relationships can have a huge impact, but what’s the best way to optimize them? For tactical advice for FinServs on how to build better partnerships with fintechs and ScaleUps, read our exclusive report here.