Thinking like a bank is not always the answer

Welcome roadmap

Guidelines, written with the help of the UK's five largest banks, have been developed to help Fintechs in the often daunting task of working with established financial institutions. These provide helpful pointers and tangible landmarks as to what established financial institutions are looking for from their (potential) Fintech partners at various stages of the collaboration journey.

The guidelines will undoubtedly help those Fintechs which find themselves interacting with banks, insurers, asset managers etc. whose approach often appears impenetrable from the outside. They will give Fintechs a form of roadmap to help them navigate these unfamiliar ways of working.

Bridging the gulf

The fact that the guidelines are required at all highlights that there is a gulf of understanding between Fintechs and established financial institutions. This is to be expected, and often justified, for a number of reasons, not least that the two are often subject to different levels of regulation and oversight (internal and external).

Two way street

However, there is a risk that financial institutions’ response to the disruption brought by Fintechs is solely to partner with them and educate them on how to think like a financial institution. There must be at least some movement the other way as well - financial institutions need to understand why, as much as how, their industry is being disrupted before they can counter it in a truly effective way.

That’s why established financial institutions also need to be willing to learn from their Fintech counterparts. This might mean a streamlining of bureaucratic governance and approval processes or just a greater willingness to accept that things might not be perfect and quicker movement to address issues identified. While the new guidelines are welcome in showing Fintechs how to think like financial institutions, financial institutions also need to learn to think more like Fintechs.