By David Tuckwell on Tuesday 20 June 2017
Fintechs and banks can cooperate on APIs, with both industries benefiting
Fintechs should work with banks, and APIs will sort the winners from the losers as the world moves towards open banking.
Fintechs beat banks on customer satisfaction and as APIs grow in popularity, banks should learn from fintechs, Consultancy firm Capgemini’s annual World Retail Banking Report has found.
“FinTech companies have done a good job of cracking the code on what customers want, which presents a threat to bank-customer relationships,” Capgemini said.
“BigTech companies like Amazon, Apple and Facebook are conditioning customers to expect more from their banks and the experience they provide.”
The report noted that fintechs' success correlates with customer satisfaction. Fintech was successful in North America where customers were very satisfied, but less so in continental Europe where customers were more satisfied with banks.
The report also flagged APIs as the next hurdle for banks, adding that doing so could prove profitable.
“Through APIs banks and fintechs will be able to leverage their complementary strengths. Banks have enormous customer bases, funding capabilities, and expertise in operating large processing networks and dealing with regulators,” the report said.
“Fintechs, meanwhile, can offer new ways of looking at financial products, along with cultures that prize a focus on customer needs and speedy action. Together the two entities have a better chance of using data more effectively to ... generate shared revenue streams.”
That banks and fintechs could work together was the mainstream view in both industries, with 90 percent of bankers and 75 percent of fintech executives saying they expect collaboration in the future.