Building bank-fintech alliances that put customers first

Renata Caine is general manager and senior vice president for embedded finance at Green Dot. She leads Green Dot’s banking-as-a-service business, focusing on embedded finance that drives retention, engagement and growth for its partners.

For banks and fintechs, teaming up with the right partners can redefine what’s possible. 

Strategic collaboration drives growth, sparks innovation and opens access to new markets. 

An EY survey found that 95% of banks use fintech partnerships to enhance their digital products, while 86% rely on them to reduce costs and accelerate implementation timelines. Today, both banks and fintechs could use strong partners as the regulatory landscape shifts, new pressures come from Washington, and more. 

So how can these partnerships deliver the results they promise? As banks and fintechs work together, they should focus on three key factors: choosing the right partner, respecting regulatory boundaries, and improving technical integrations.

Choose the right partner

Before entering a partnership, banks and fintechs should clarify their strategy, goals and how collaboration will drive business outcomes. Focus on the problem being solved, how success will be measured and whether the partner can scale. Conduct thorough due diligence, including risk and technology evaluations, and set performance checkpoints to stay aligned.

Cultural fit matters, too. Differences in values, operations and communication styles can derail progress. Leaders should engage cross-functional teams and treat each other as true partners, not just providers, with shared goals and a unified approach.

The stakes are high: Nearly 40% of bank-fintech partnerships fail to operationalize, according to EY-Parthenon. Fintechs may offer innovative solutions, but banks must ensure they meet compliance standards, integrate seamlessly and align culturally. Establishing these checks early can prevent costly complications later.

Respect regulatory guardrails

Bank-fintech partnerships must operate within strict regulatory frameworks. In December 2024, federal agencies, including the FDIC, signaled increased scrutiny of banks’ oversight of fintech partners. To stay compliant, contracts should clearly define roles, responsibilities and expectations, with thorough documentation for regulators. Transparency around privacy, cybersecurity and data flows is essential, along with strong governance and third-party risk management.

Proactive systems, such as real-time monitoring, regular audits and ongoing training, help mitigate risk. Cultural and operational alignment also matters, especially as many partnerships span domestic and international markets. Global regulators are increasingly focused on preventing systemic risks, making it critical for banks and fintechs to stay informed on evolving standards.

Strong governance from the outset isn’t optional, it’s foundational. Without it, even promising partnerships can falter.

Improving technical integrations

Technology integration is often the make-or-break factor in bank-fintech partnerships. Banks can boost success by investing in flexible platforms — especially those with APIs — to streamline onboarding and enhance customer experiences. Third-party risk management is also key.

Artificial intelligence is transforming financial services, helping automate compliance and customer monitoring. But opaque AI systems can pose challenges for banks trying to understand and oversee fintech operations. Transparency and alignment on data usage are critical.

Fintechs often lead with innovation, offering tailored, data-driven experiences that drive customer satisfaction and loyalty. Their agility and tech expertise can help banks attract new customers and expand offerings. However, banks must ensure fintechs meet compliance standards and integrate smoothly with existing systems.

Quest for success brings customer benefits 

Banks and fintechs are undergoing a major shift: one where partnerships unlock value neither could achieve alone. While technology plays a critical role, success ultimately depends on keeping customers at the center. Strong partnerships should enhance the customer experience while building resilience and expanding capabilities for both sides.

Ultimately, fintechs are valuable partners — bringing fresh solutions, entrepreneurial energy and customer-centric design — while banks provide scale, trust and regulatory discipline. Together, they can deliver seamless, personalized experiences that drive loyalty and growth. But this requires more than tech: it demands alignment, transparency and a shared commitment to customer and business outcomes.