Page 47 - Banking Finance October 2020

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consumer demand. The banks started collaborations in tech and traditional banking has its advantages and
different ways such as venture capital investments, disadvantages hence to be strong on both fronts effective
incubator programs and accelerator programs. partnership is a must. In cases of Fin tech firms they are
Collaborations will provide the perfect opportunity to lagging behind in aspects such as brand name, customer
leverage the full potential of the technology and will allow trust, capital and infrastructure.
them to meet the demand of digitally savvy users.

For startups, partnerships with financial institutions will
Fruitful collaborations will heavily rely on traditional
provide access to funds for future growth. With joint efforts,
institutions' ability to identify and assess whether candidates
their businesses will more likely be scalable and sustainable
for partnership have the characteristics necessary for
in the long run. For banks, such partnerships would mean a
sustained success across four pillars: People, Finance,
data-driven approach with lesser costs, low redundancy,
Business, and Technology. With adopting fin tech revolution solid technical know-how, and increased efficiency. Banks
by banks, soon would come a day when there would be no
can significantly reduce structural costs, provide employees
requirement of physical cash and everything will be possible more time for value-added tasks, and enable enhanced
to mobile, cards and Internet. regulatory compliance. Unified efforts can create a solid
financial system that works for all.
Traditional financial institutions are adopting many Fin tech
customer service enhancements, while retaining strengths Such engagements should work with the highest integrity,
including risk management, infrastructure, regulatory strong level of security, and greater transparency to reap
expertise, customer trust, access to capital, and more. Both the full benefits of the next wave of tech innovation. All
traditional and Fin Tech firms stand to gain from a symbiotic, banks are in active dialogues with Fin Tech firs to see how
collaborative relationship. For a successful collaboration, effectively it will be suitable and can be integrated with
both sets of firms will need to remain open-minded and keep banks system.
a dedicated focus on collaboration. Both traditional financial
institutions and Fin techs have struggled with finding the Conclusion
right partners, efficiently working together, and effectively India is having a huge scope for Fin Tech players with the
scaling innovation. digital India initiative the infrastructure was also put in place
for the rise of such firms. The growth in Fin Tech solutions
Fin tech leaders have struggled with traditional institutions'
has seen huge uptick in the last couple of years. This is
lack of agility, willingness to partner, and culture fit.
further expected to grow with the renewed interest from
However, Fin techs also need to be mindful of incumbents' banks and regulatory bodies. Banks have started to actively
constraints and clearly articulate the value proposition they
participate in the Fin Tech boom by looking for partnerships
can achieve together to be a collaborative partner. Financial and investments with start-ups, while the government and
institutions need to respect the Fin Techs' culture to avoid regulators are drawing new frameworks and policies that
losing their agility, which is one of the major assets that they incentivize innovation and entrepreneurship.
bring to projects. The challenge being throw open to both
segments will be to select the best fit Fin Tech with whom Consumers range from financially illiterate to extremely
to collaborate. Achieving the next level of high growth and sophisticated global investors. Consumers may be multi-
scale will require Fin tech firms to collaborate with lingual or may only speak their native language. They may
traditional financial institutions to gain access to a larger have access to the latest technology or may be limited to
customer base. basic phones and limited internet connectivity. This creates
a variety of use cases and needs. The robust ecosystem of
A robust partner ecosystem is also critical for creating technology, underlying platforms and skilled people and
better customer-centric products and services. The future government / regulatory initiatives have provided Fin tech
of financial services is in the hands of both the Fin Tech and players with the opportunity to identify specific niches and
traditional firms that can complement each other's strengths the capability to address their pain points, before growing
to meet customer needs and redefine the journey. Both Fin to address other market segments. T

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