Financial institutions are realising their business ambitions through collaboration with fintechs, according to a survey released today by ING Bank and Illuminate Financial2.
The survey showed the majority of banks felt that the implementation of a institutional fintech solution had contributed towards achieving business goals by lowering their operational costs (87%) as well as improving regulatory compliance (67%). Two fifths (40%) of fintechs agreed that reducing operational costs was the primary driver for banks adopting fintech solutions followed by improving regulatory compliance (21%).
The survey, now in its second year, showed that just under a third (30%) of fintechs believed that the adoption of new technologies is always or often supported at bank management or board-level compared to half (50%) of banks who reported the same.
However, both banks and fintechs recognise that this collaboration is not without its challenges. Three fifths (60%) of banks acknowledged that navigating organisational decision-making is a challenge in partnering with a financial institution, an improvement on last year’s 70%. However, fintechs do not share the same sentiment as 65% of them believe this is now a greater challenge, up from 46% in 2017.
Furthermore, 72% of fintechs said it was either very difficult or difficult to connect with the relevant people in a financial institution, compared to 50% of banks who agreed, an improvement of 10% from 2017.
The survey results were revealed at the launch of ING’s Innovation Lab in London on 11th March. The Lab enables fintechs, ING partners and clients to work closely together on projects to advance technological developments in financial services.
Ivar Wiersma, Global Head of ING Labs Wholesale Banking said: “London is one of the largest financial ecosystems and is widely regarded as the fintech capital of Europe. We are pleased to open our newest Innovation Lab here, at the heart of financial services innovation, to continue to collaborate and build closer relationships with financial technology companies. In the last 12 months we have made steady progress with our work with fintechs and remain committed to deepening our relationships to advance corporate innovation and venture building models.”
Luca Zorzino, Investment Director, and Illuminate Financial, said: “Banks recognise that increasing competitive pressures cannot be addressed with legacy technologies and the need to develop product and services that empower customers can only be met by adopting or partnering with emerging vendors. We are pleased to see engagement between banks and fintechs improving, and while there are still challenges to overcome, we look forward to continuing our work to strengthen the bank-fintech relationship and support innovation through validation and adoption initiatives.”
Source: ING