As the saying goes, “the only constant in life is change,” which is certain for the banking industry. It’s been nearly two years since the coronavirus pandemic began, and many banks and credit unions have undergone a significant digital transformation in response. Many financial institutions that were already on the path of digitalization have continued expanding their digital offerings to meet the needs of their customers and members. Meanwhile, the pandemic all but forced financial institutions that were hesitant or had not yet begun implementing new technology to kickstart the adoption process. While digitalization is critical to scaling business, keeping customers and members happy, and maintaining a competitive edge – it can quickly become challenging to manage each fintech partnership to maximize the investment.
It’s great that more financial institutions are welcoming technological innovations, but banks and credit unions must consider the long-term impact of their partnerships. According to recent insights compiled by the Federal Reserve and published in Community Bank Access to Innovation through Partnerships, fintech partnerships are most effective when three core elements are present:
- Commitment to innovation across the community bank
- Alignment of priorities and objectives of the community bank and its fintech partner
- A thoughtful approach to establishing technical connections between key parties including bank, fintech, and the bank’s core services provider
If leveraging new technology is on your financial institution’s New Year’s Resolution list for 2022, be sure to consider how each element is reflected in your bank or credit union.