3 Reasons to Partner with FinTech to Launch Your Bank or Credit Union’s Digital Transformation
By David Mitchell, President of NYMBUS
If you keep up with fintech news, you probably have heard the recent buzz about Amazon Bank. Computer Weekly reported that they could have 70 million customers within five years. Bankers who used to see fintech as a threat are now seeing how fintech companies can be a valuable partner that helps them embrace a digital-first banking model. In fact, 82% of financial service companies plan to increase fintech partnerships by 2022 according to PwC. And for good reason – fintech is helping banks and credit unions launch their digital transformation while reaching their goals. Here are the top three reasons to consider partnering with the fintech industry.
Enable Business Growth by Launching New Business Models
Consumer banking is at the highest risk for disruption by 2020 according to PwC, which is putting the pressure on financial services to quickly innovate. It can be difficult to repackage older legacy core systems to deliver new products and services that consumers demand. Some have already found ways to partner with fintech to bypass the lengthy process of transforming their core by launching new stand-alone digital banking models, like Finn by Chase.
By launching a spinoff banking model, financial institutions can reach new markets outside of their footprint, and appeal to a wider range of demographics, like the coveted Millennial segment. By launching a digital-only banking model, financial institutions can offer online accounts with lower fees and higher savings rates while maintaining higher margins from avoiding the cost of doing business in physical branches. Being able to grow the business by launching new business models is one of the main reasons it makes sense to work with fintech disruptors.
Keep Pace with Innovation
To offer a modern digital banking experience, many financial institutions embark upon updating their legacy core technology, as Capgemini found that 87% of banks say their current core can’t keep up. Meanwhile many CIOs and CEOs are frustrated at the amount of time it can take to do a full core conversion, often locked into long-term contracts with their legacy core providers. It’s no wonder Efma-Infosys found that half of financial institutions see their legacy technology environment as a barrier to digital transformation.
That’s where fintech can help. Newer core disruptors like NYMBUS have replaced legacy-siloed systems. Rather than repackage old engines, today’s new cores are cloud-based and built upon open API coding. Now, banks and credit unions can achieve technology advances in just weeks – gains that legacy providers still measure in years. In fact, sometimes the discovery process takes longer than the conversion and implementation.
If your financial institution can’t replace the core, it may make more sense to structure a phased approach. NYMBUS is helping clients launch stand-alone digital brands in as few as 90 days. Full-service and built on their modern core platform, this approach helps the institution innovate quickly, doesn’t disrupt the current customer base, and attracts new digital consumers and revenue.
Improve Operational Efficiency & ROI
The last and possibly most important reason to partner with fintech companies is that they can help you improve operational efficiency and demonstrate ROI at the same time. Case in point: 40% of banks say they benefit by collaborating with fintech from lowering capital expenditures and the cost of doing business according to Mannat. NYMBUS SmartLaunch™ is the newest example, offering financial institutions a complete turnkey solution for attracting new customers and revenue, with no conversion or additional staff required. Now that’s evolution: installing a tech solution that improves a bank’s immediate 2018 bottom line.
Suddenly, digitally transforming a banking business is possible with the help of fintech companies like NYMBUS. An investment in a fintech partner can help you launch new business models that enable business growth and keep pace with innovation while improving operational efficiency and profitably.
If you’d like to learn more about how we can help your organization transform and reach new digital customers, contact us to learn more.