Why service-oriented fintechs will win the partnership race
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Walt Granville, head of growth at Everyware, dives into how fintech partnerships can succeed. With decades of experience in the payments space, Granville is focused on pioneering growth strategies to enhance and drive Everyware’s digital banking and payment solutions as part of the company's long-term growth strategy.
With digitization and technological advancements driving rapid product innovation in financial technology, businesses and software developers recognize that partnering with savvy fintech companies can significantly enhance their user experience. Research from McKinsey indicates that revenues in the fintech industry are projected to grow almost three times faster than those in the traditional banking sector between 2023 and 2028. This "fintech revolution" presents businesses with opportunities to expand their reach, enhance their service offerings and drive innovation.
We all know that delivering a customer-centric product is essential, but the true value for growth-oriented businesses lies in the level of support offered by their fintech partners. In an industry where trust, speed and reliability are paramount, fintechs providing exceptional, proactive client service can help businesses do the same for their own customers. According to Accenture, companies that view customer service as a value center, rather than a cost center, see 3.5 times greater revenue growth. Experience-driven fintechs that offer dedicated support, intuitive interfaces and streamlined processes help to create a standard of positive, responsive interactions for the businesses they support.
From my professional experience, businesses increasingly recognize the benefits of transitioning towards service-oriented models to gain a competitive edge, improve user experience and cultivate enduring client relationships. Businesses looking to build their tech stack should choose partners who are also service-oriented. Service-oriented fintechs, for example, can onboard quicker, integrate more seamlessly into current systems, and remain agile to address customer needs. Ultimately, the fintechs that put their business partner at the center, too, will win.
Let’s have a look at why service-oriented fintechs will better help companies differentiate and capture market share:
Understanding Business Needs and Ecosystem: A significant benefit of service-oriented fintechs is their understanding of the unique needs and ecosystems their partners operate within. These are fintechs that can serve diverse, nuanced industries such as healthcare, insurance and retail by tailoring their integration approaches to align with industry-specific requirements and challenges. By grasping competitive pressures, regulatory environments and customer expectations, fintechs can position their solutions to add genuine value to businesses and their customers.
Ability to Innovate: Fintechs have been disruptive largely due to their ability to innovate quickly. Unburdened by legacy systems, they can be more agile in using emerging technologies to anticipate and solve customer needs. Partners who understand this fast-paced industry are committed to innovating, adapting and engaging in discussions on providing versatile business solutions. Companies see 10 times higher revenue growth when their service organization is involved in product development. By acting on real-time insights, fintechs can quickly develop and deploy tailor-made features, products or services, leading to higher client satisfaction and retention for their partners. For instance, consider a company dealing with high-value online transactions that is struggling with significant financial losses due to identity fraud issues in their online payments. By bringing this issue to their service-focused fintech provider, the organization can offer innovative solutions tailored to the merchant's needs. One effective strategy could be integrating cutting-edge biometric identity verification functionality directly into the payment flow that the company is already using. This results in a seamless identity verification and payment and invoicing platform integration that is custom-tailored to address the specific challenges faced by merchants in similar situations. Such an approach not only mitigates risks associated with identity theft and fraud, but also ensures a smooth, secure and consistent user experience across all e-commerce transactions.
Faster Go-to-Market Speed: Driven by innovation, service-oriented fintechs aim for rapid deployment of their services to help their customers capture market share, establish brand recognition and gain early mover advantages. They expedite onboarding processes, enabling clients to quickly set up new products or services ahead of competitors. Delays in onboarding can introduce risks such as increased project costs, missed market opportunities and potential disruptions to business operations.
Partnership Opportunities: Service-oriented fintechs can leverage their expertise and niche offerings to create mutually beneficial alliances with banks, technology firms or regulatory bodies. Such partnerships enhance market reach, access to resources and overall competitiveness. This also enables greater access to potential collaborations, offering customers a more comprehensive experience.
Bank and fintech partnerships around payment technologies are proving to be highly synergistic. For example, banks can benefit from adopting new, cutting-edge tools like real-time payment processing and SMS invoicing, enhancing their appeal and customer retention, while expanding revenue through new, modern offerings.
Fintechs gain broader service distribution and enhanced market visibility. Moreover, these partnerships provide merchants and consumers with fast access to trusted, reliable, interoperable solutions, saving significant time and resources that would otherwise be spent locating and implementing these technologies independently.
Even amid heightened regulatory scrutiny in the U.S., fintech-bank partnerships foster innovation by combining banks' stability with fintechs' agility, leading to the development of innovative solutions that allow banks to stay competitive and compliant. With the inherent digital-first prowess of service-oriented fintechs, banks can also leverage a fintech’s nimble ability to make necessary, fast changes among regulatory shifts. These alliances not only enhance market competitiveness but also contribute to a more robust and compliant financial services landscape.
Securing service-oriented fintech partnerships leads to higher satisfaction levels for businesses and their end-users in the competitive financial services industry. As we look to the back half of 2024, it may be time for a vendor audit to evaluate satisfaction and experience. Ensuring fintech partnerships are both customer-centric and service-oriented will help secure revenue and cement long-term customer loyalty.
