The fintech industry has never been fiercer. Funding levels have reached astronomical levels, as new ideas percolate throughout the financial ecosystem, meaning more and more fintechs are becoming experts and pioneers in a very specific aspect of the financial landscape.
By adopting a collaborative as opposed to a competitive mindset, firms are given a platform to leverage business-to-business relationships into mutually successful partnerships, and both fintech players and football clubs are increasingly spotting the opportunities.
Collaborating is key to being successful in the fintech sector as each innovator looks to thrive in a modular ecosystem, according to Will Marwick, CEO at IFX Payments.
Marwick told City A.M. that “as the industry continues to grow, success will not be afforded to those with the lowest cost offerings but rather those that integrate value-led propositions that make the product more appealing to its customer base.”
Business must recognise that success comes from leveraging the strengths of others to amplify their own, Marwick stressed.
“Firms must admit that they can’t be the best at everything and counter that by creating strategic partnerships that will reign supreme. Ultimately, embracing other specialists within the sector allows fintech’s to expand their capabilities and set themselves apart from competitors.”
For example, recent regulatory led changes, such as Strong Customer Authentication, present not just compliance led demands, but also pose UX challenges, he explained.
“If you must implement a compliant SCA process, what will set you apart is the least intrusive and most streamlined UX; and not many fintechs have the capability, knowledge or funding to do it themselves, so identifying the perfect partner is key to not just obtaining new customers but keeping your existing ones,” Marwick noted.
Moreover, fintechs should consider how their partners operate and pursue firms that are aligned not just in culture, but also in their approach to innovation and values.”
He is convinced that if firms can identify truly aligned partners, they can extend their offering and increase their speed to market to maintain their competitive advantage.
“At the end of the day, the end goal for any partnership is for your customers and partners to see it and instantly understand why you’ve done it.”
Forging partnerships with players from different industries is often overlooked out of fear of diluting a brand or communicating mixed messages to customers.
“But I’ve found that cross industry partnerships can be a powerful tool that builds brand awareness, reaches new audiences while generating commercial values through sales,” Marwick said.
Brand partnerships can often be based on more personal passions, for instance Marwick said his company is involved in several sports partnerships such as Brentford FC, Hibernian FC and Oxford United.
“Partnerships in the sports industry have driven invaluable brand visibility, building integrity and positive affection.”Will Marwick, CEO at IFX Payments
“The combination of the two streams of work adds authenticity to a business. When our sales team speak to prospective clients across numerous industries, we increase the chance of immediate recognition. We have improved our chances of having successful conversations and ultimately working together.”
Friend or foe?
Developing partnerships with competitors is also a key part of the puzzle, particularly as the fintech sector has seen a 70 per cent increase in the number of businesses entering the market in 2021.
“This means that corporations and consumers have more and more to choose from when building a digital financial ecosystem that aligns to their ever-growing needs,” Marwick said.
Whilst others may be wary of collaborating with other brands over developing similar capabilities in house, ultimately the risks of not collaborating could be greater, he warned.
“In the current environment, the idea of a one-stop shop, or being able to solely serve a client with a set of products or services, is becoming increasingly challenging as client demands and expectations are higher than ever.”
This has been driven even more by the pandemic which has expedited digitalisation as companies come to terms with the risk of not having an online presence.
“So, when setting out to find a mutually beneficial partner, we must look outside of our industry as well as at those working directly in our practice areas. While at first partnering with a competitor may seem counter initiative, you’ll find that by collaborating with them on the right project, and at the right time, you’ll strengthen your offering, brand and ultimately reign supreme in the ever-competitive market.”
Ultimately, the future of fintech lies in collaboration, and as businesses continue their post pandemic recovery, Marwick urges businesses to look at not just traditional partnerships, but also cross-industry partners and even competitors to help their bottom lines and drive commercial value.