Banking Tech Awards USA 2023 winner: SavvyMoney – the power of partnerships in fintech & banking
At the 2023 Banking Tech Awards USA, SavvyMoney won in the Best Embedded Finance System category with its SavvyMoney Credit Score solution.
70% of executives at FIs believe fintech partnerships are crucial to business longevity
Digital alternatives to traditional banking, such as embedded finance and Banking-as-a-Service (BaaS), have drastically risen in popularity in the last several years and proven to be formidable competitors in the sector. A recent survey by Economist Impact found that more than half of top-level banking leaders are aware of – and even cautious of – this rising competition. Despite this trepidation, nearly 90% of banks and financial institutions (FIs) see fintech partnerships as somewhat or very important to their organization, according to a report by Cornerstone Advisors. This number has grown from just 49% in 2021.
Why this meteoric rise in popularity? Banks have recognized their customers’ desire for digital-first services. Instead of creating in-house virtual platforms, many FIs are harnessing the power of fintechs and their valuable financial tools while still leveraging their existing customers’ trust.
Let’s dig into why so many FIs are turning to fintechs versus developing their own solutions.
Advantages of partnering with a fintech
When fintechs arrived on the scene, many traditional FIs saw them as obvious competition. However, as the industry evolved, FI leaders began to see the potential in partnership. Now, 70% of executives at FIs believe fintech partnerships are crucial to business longevity because they offer customers enhanced, innovative services, according to Cornerstone Advisors.
Modern customers have come to expect cutting-edge tools, which fintechs are experts in developing. From credit score solutions to personalized offers, fintech partnerships allow banks to offer innovative services without spending time and money developing them in-house.
And the benefits of an FI-fintech partnership are a two-way street. The established trust, customer base and existing infrastructure that banks bring to the table can be leveraged by fintechs to promote rapid growth. A productive partnership also fosters market agility for the fintech and the FI, ensuring mutual success.
The rise of fintech partnerships
As an industry, fintechs are expected to jump to almost $700 billion in value by the end of the decade (according to Adroit Market Research). Leaders of traditional FIs hoping to hop on that bandwagon will benefit from establishing partnerships soon. In fact, in just the past few years, almost half of banks have chosen to partner with fintechs, according to research by Economist Impact. The number of partnerships is only expected to increase from here.
Among the high-profile FIs that have already partnered with a fintech is Co-Op Solutions. The organization debuted a fintech partnership program focused on connecting “pre-vetted third-party sellers with motivated credit union buyers”. These sellers offer customers innovative financial solutions that Co-Op Solutions would be unable to provide internally, helping credit unions gain a competitive edge in the marketplace.
Picking the best fintech partner
An FI’s digital strategy is critical in an increasingly digital-first world. While it was once considered a best practice to offer digital banking solutions, it is now a vital industry standard, and an FI’s successful online presence can hinge on the value of its fintech partnership. FIs seeking to draw in more users and enhance customer satisfaction must endeavor to partner with fintechs that share these values and goals. For example, if an FI hopes to give customers insights into their credit scores, it must partner with a fintech that offers robust credit score solutions. Aligned goals build trust and promote a mutually beneficial business relationship.
A fintech’s reliability, innovation, integration and pricing are also critical factors for an FI to consider when seeking out a partner. Once a potential partner has been identified, it’s imperative that FIs carry out due diligence to ensure a successful partnership. If each of these components is carefully considered before finalizing a partnership, FI leaders will be empowered to make the best connections that drive digital goals forward while providing customer value.
Partnerships between traditional FIs and fintechs benefit the businesses and their customers alike. By leveraging technology to enhance customer experiences, FIs can establish stickier, more robust relationships while simultaneously boosting growth and revenue within the organization. Those that fail to adopt fintech partnerships can expect to be left behind.
About the Author
JB Orecchia is the president and CEO of SavvyMoney. Since 2011, JB and his team have built SavvyMoney into an industry-leading credit and lending tool that today integrates with 40 digital banking platforms and supports over 1,100 financial institutions with their goal of providing financial education and personalized lending.
JB has more than 34 years of experience in consumer finance, fintech and interactive media. He started his finance career in 1988 with 10 years in various senior roles at Household International in lending and marketing.
In 1998, he saw an opportunity to make credit reports accessible over the internet and joined the original senior team at FreeCreditReport.com (part of Experian). As EVP of partnership marketing, he led the team responsible for business development and online marketing of the first direct-to-consumer credit report and score product for ten years.
To expand on his digital marketing experience post-Experian and pre-SavvyMoney, JB had the opportunity to be vice president of marketing for Disney Online, where he directed online marketing, CRM, research and analytics initiatives.
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