FinTech 2.0

Deutsche Bank
FinTech 2.0
Sustainable business models:
In addition to technical skills and tangible assets, the bank must consider the
fintech’s combined expertise and management set-up. For example, a fintech
primed for success will possess not only technical excellence and strengths
in innovation and creativity, but also human resources from a variety of
backgrounds – including banking and regulation – with the focus on offering
a comprehensive market understanding and a client-centric approach. For
instance, although fintechs are not currently regulated to the same degree as
banks, a bank will look for a fintech that meets their own values and standards
in terms of AML and KYC checks, data handling and storage, security and so on.
In fact, some fintechs may have market-leading algorithms for these processes; a
clear indication of a fintech ready and willing to partner with banking providers.
With the recent surge in fintech companies and a significant number of startups
entering the market each month, picking a winner may lie outside banks’
in-house capabilities. But through a network of venture capital companies,
incubators, accelerators, innovation labs and other specialist institutions, banks
can remain close to the market and access expertise that enables them to
identify and approach suitable partners early on.
Finally, it is worth noting that there may be time and cost savings to be
derived from exploring existing bank-fintech relationships. A pre-established
provider-client relationship will allow the partners to bypass the time-consuming
and costly process of onboarding and compliance requirements (such as KYC,
AML and embargo filtering regulations). This means that fintech firms that
have already been onboarded as a banking client may find partnership with this
existing banking partner the simplest option.
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