June 26, 2017

Consumers Want Fintech: Fintechs Want Partnerships With Banks

EXCERPT: Consumers have clearly expressed an interest and demand for a digital lending experience, and fintechs are delivering. Meanwhile, fintechs seek to partner with banks, but the feeling is not necessarily mutual. What banks and fintechs need is a seasoned loan sale advisor to help foster a partnership that will be profitable for both sides. [caption id="attachment_696" align="alignnone" width="2060"]Mobile banking graphic technology background vector design by EPS 10[/caption] Fintech lenders have emerged over the recent past to meet the demand of consumers who increasingly seek a digital banking experience.  Today's consumers are highly digital and are increasingly demanding a quick, convenient, online experience when it comes to doing their banking and obtaining loans. They have come to expect a high level of engagement with their financial institution, and in order to ensure these expectations are met quickly, they're willing to make a switch. The emergence of fintech has filled the void for many consumers who are looking for a more digital banking experience. A growing number of consumers feel that fintech helps make things more efficient, provides more information easily and quickly, offers more transparency, and provides heightened automation. Finechs Want to Team Up With Banks, But Do Banks Want to Team Up With Fintechs? Consumers clearly want more access to fintech bankers, while fintech firms continue to seek partnerships with banks. Fintech companies are providing game-changing services in the financial sector and are responding to strengthening consumer demand for technology in the banking world. Yet they continue to look to team up with banks in order to leverage their reach, their customer relationships, their balance sheet and their experience and expertise in regulatory compliance and risk management. Banks can likewise benefit from a partnership with fintechs to leverage their technological expertise and cost-effective products and services. Partnerships like these can enable banks to shift into a digital age after being long-dependent on age-old loan applications. Despite the obvious advantages for both sides, it seems to be a challenge for fintechs to gain much ground in this endeavor. Many banks remain hesitant to embrace new technology despite heightened threats from nonbank online lenders. Traditional banks have considered fintechs to be a potential threat ever since they first emerged on the lending scene, so it is not surprising that many banks are somewhat indecisive and skeptical about partnering with these financial services companies. Such hesitation is just one of many reasons why partnerships between banks and fintechs have been rather stagnant. While there certainly have been several successful partnerships between banks and fintechs - such as the teaming up of OnDeck with JPMorgan Chase back in 2015 - the trend hasn't been as strong as once anticipated. Many banks have either gone about tapping into the online digital realm without teaming up with fintechs, or have just stood by and done nothing out of fear that fintech firms are just out to steal their customers. Historically, banks have been slow to adopt change, which certainly holds true when it comes to implementing innovative changes and embracing partnerships, much to the disappointment of fintechs. Banks are often leery about teaming up with companies that they view as their direct competition and that are potentially striving to reach their status. Yet such partnerships can be potentially lucrative; perhaps the missing link is a seasoned loan sale advisor to make the right connection happen. Loan Sale Advisors - Fostering a Healthy Partnership Between Banks and Fintechs The benefits of a partnership with fintech and banks are obvious and have been well documented. While fintechs have been making it known that they're highly interested in such a collaboration, banks have not exactly shown the same level of zeal. What both banks and fintechs need is an objective third party entity that can provide unbiased and professional advice regarding potential partnering. At Garnet Capital, we can successfully team up the right candidates with each other to ensure that the partnership will foster a highly lucrative relationship for all involved. Sign up for our newsletter to stay in-the-know about the latest newsworthy stories in the financial industry.