The Forces Disrupting Payments

The potential for bank/fintech collaboration is driving a surge in innovation

The Forces Disrupting Payments

The potential for bank/fintech collaboration is driving a surge in innovation

October 2022

Disintermediation is amping up the sense of competition between FIs and fintechs, but also enabling many opportunities for innovation and cooperation between them—with both sides having much to gain.

The Forces Disrupting Payments

Can fintechs disintermediate banks? Will the future of payments involve more collaboration between them ever before?

 

Find out the answer to these, and other pressing questions, in our exclusive report with Aite-Novarica.

With today’s capital constraints, regulatory burdens and cost pressures, it can be challenging for financial institutions (FIs) to keep up with the pace of change and abundance of choice in payments. Because of this lag, businesses can sometimes be enticed to circumvent their banks by engaging directly with fintechs to solve for points of friction in the payments process.

 

 

This so-called “disintermediation” is amping up the sense of competition between FIs and fintechs, but also enabling many opportunities for innovation and cooperation between them — with both sides having much to gain.

 

 

The potential for collaboration is driving a surge in innovation as the industry races to meet new end-user demands. The future of payments should see a lot more synergies between banks and fintechs as they collaborate on new ways to drive growth.

In this research, several supporting trends have been identified:

Many FIs are modifying their strategy roadmaps to partner and collaborate with fintechs

to bring better, more robust capabilities to market quicker than they could by utilizing only internal resources and development teams.

Overall, businesses report that they would actually rather partner with an FI

than have to seek other third-party fintech providers. 

Some 62% of businesses are already working with a fintech provider

and 28% are working with multiple fintech providers.

Only 34% of businesses feel that their FI fully understands their needs

when it comes to payments. This represents a large opportunity for FIs to invest and differentiate to meet the individual needs of their end clients, including by partnering up with other banks or purchasing white-labeled solutions.

Almost 60% of businesses report that the speed of payment and settlement is the biggest gap

in their current payment strategy. 

Insight #6

An overwhelming

88% of businesses have already made a significant, or somewhat significant, investment in improving their payment technologies

or processes, and this number is expected to remain high.

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