(8 May 2023 – Global) Banks view fintech partnerships as a vital strategy with three in four global banks seeking to connect with three fintechs in the next 12-18 months according to new Finastra research.
The newly released research, conducted by East & Partners, was based on 783 direct interviews with 260 banks in the United Kingdom (UK), Europe, the Middle East, Asia Pacific, and the Americas in addition to 393 interviews with North American community markets banks and financial institutions.
The analysis explores the current appetite in the marketplace for fintech investment and integration, and Environmental, Social and Governance (ESG). with three in four banks looking to connect with three fintechs in the next 12-18 months. The largest proportion of respondents plan to plug into a platform of integrated fintech solutions (56 percent), with only six percent preferring to build capabilities in-house. This is particularly prevalent in Europe, where this is 73 percent and five percent, respectively.
“In an environment characterised by uncertainty, high inflation, fluctuating interest rates and recessionary risks, banks are under an increasing amount of pressure to drive operational costs down while continuing to improve how they serve their customers” commented Finastra EVP Lending, Isabel Fernandez.
“Our research demonstrates the recognition from banks that they cannot navigate these waters alone. They are instead opting to partner with fintechs, with a preference for plugging into a platform of integrated fintech solutions, to help them to adapt quickly while reducing costs.”
“The research also shows that ESG is continuing to expand throughout a bank’s internal operations and external offerings. Major inflection points in recent years have had, and are still having, a dramatic impact on how financial services is evolving,” said East & Partners Global Head of Markets Analysis, Martin Smith.
“This is forcing institutions to reconsider how they manage risk, increase their agility, and fast-track innovation to evolve with new demands. We partnered with Finastra to better understand and showcase how banks are adapting to this environment. We believe that despite the challenges facing global banks, the industry’s focus on collaboration and driving ESG initiatives forward, highlighted by the research, will ultimately have great benefits for financial institutions and their customers, today and in the future.”
Access the full reports and findings here:
How financial institutions can win in North American Community Markets: Digital transformation