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Sibos 2021: what fintechs need to work with banks

ANZ Insights

Published September 8 2021

The impact of the COVID-19 pandemic has accelerated a tightening of ties between banks and fintechs, helped in part by a sizable investment in digital operations across the financial services sector.

Barriers between the two groups have broken down as the benefits of cooperation become increasingly clear – if they can find a way to speak the same language. Fortunately, there are things the two parties can do to ensure they are best prepared for those conversations, and successfully leverage each other’s strengths, according to two experts at ANZ.

Ultimately, [banks] have the distribution and the customer base, which is what the fintechs need,” Sally Robinson, ANZ’s Head of Guarantees Product, Institutional said on podcast. “And [fintechs] have the ideas and the ability to build and innovate quite quickly.”

“That concept of partnership [works]. Most fintechs need customers in order to have a viable business model. If we can marry the two, that it is quite beneficial for the industry overall.”

Robinson made the comments on a podcast recorded in the lead up to the SIBOS 2021 financial services conference in October, where banks and fintechs will rub virtual shoulders and discuss the shape of the sector for 2022.

Also on the call was Hari Janakiraman, Head of Trade Product, Institutional at ANZ. You can listen to the edited conversation below.

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Janakiraman said COVID had increased the sense of urgency in financial services around digitising customer products and services.

“That is more pronounced in the trade space, whether we refer to documentary goods or bank guarantees, in terms of how we really accelerate the digitisation of those products,” he said.

The flexibility afforded to smaller players that can “pivot more quickly” thanks bank can is of great value in partnerships with banks, particular large players like ANZ, Robinson said.

“[Banks] can look at things that are happening in the market that may not be on our slate,” she said. “[Partnerships] enable us to look at those new ideas, compare new providers and vendors, and ask them to think about a problem we're looking to solve.”

“Then we could think about how... we augment what the fintech can offer, to deliver something in a different way. Or perhaps with some different ideas around how that solution might be delivered.”

The ‘old’ approach from banks would have been just to build it themselves, “gradually and slowly”, Robinson said. Now partnerships offer a new approach.

“Even just the act of looking at different vendors… actually gives [bank] the chance to critically analyse those options, which you can never do if you're building it yourself,” she said.

A digital conference for digital times

The Sibos financial services conference is almost here again - and just like in 2020, it will be purely digital. From October 11, the annual conference will provide a platform for industry participants to delve into the trends which will shape the sector into 2021 and beyond.

Also returning in 2021 is ANZ Institutional’s market-leading insights and thought leadership. In the lead up to the event, we’ll be rolling out a wide range of conversations from ANZ’s industry experts, offering you a sneak peek at the ideas set to dominate the conference – and the future.

The pandemic era has seen a spike in fintechs telling banks “we have this, can you work with us?” according to Janakiraman. But it’s often not a straightforward path from there.

“Most fintechs are unaware of the level of scrutiny and detail banks will go through before they onboard someone,” Janakiraman said. “And there are many reasons for that.”

“The first and foremost is when a bank partners with fintech, it is putting its brand and reputation on the line. Fintechs need to appreciate that what they are building is bank-grade quality.”

In addition, there as significant regulations which apply to banks in terms of how they deliver products, set up platforms, and how services deal with data. For fintechs, having those answers ready to is an advantage. But it’s not just a one-way street.

“From an ANZ point of view, we are also cognisant we need to simplify some of our process,” Janakiraman said.  

“At the same time, we are also helping… fintechs to understand how they're prepared when they knock on a bank’s door.”  

For banks, there’s a responsibility to ensure partners know how the system works – and why.

“We are not just asking these things just to be difficult,” he said. “We are requesting this because we are regulated. We need to protect the customer. We need to protect the community.”

“And we are actually also helping you, as a fintech, to ensure that you are protected and your customers are protected.”

Listen to the podcast above to find out more.

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Sibos 2021: what fintechs need to work with banks
Staff writer
ANZ Insights
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