Fintechs vs. Banks: Who will win in small business banking? Both, together.
The “vs.” headlines have been blaring for years.?True, there are the titans, Amazon, Intuit, Square, and Stripe, grabbing share of card, merchant acquiring, and deposits. But also true, there are fintechs that recognize that the equation: ?1 bank + 1 fintech > 2.?Banks and fintechs have complimentary attributes that when combined can lead to exponential growth.?Banks bring a relatively warm customer base, extensive key resources (regulatory/compliance, risk management, and legal), a balance sheet, and a scaled infrastructure that can readily handle growth in transaction flows and deposit balances.?Fintechs bring a culture based on innovation (e.g., test fast/learn fast), talent that combines tech savviness, product management, and client skills, and a modern tech stack that is cloud-native and API-first.
When the “vs.” becomes a “+”, banks have the opportunity to become the challenger, the disrupter, in small business banking.?Becoming a challenger requires, first, a mind shift from delivering “nouns” (i.e., products) to enabling “verbs” (i.e., actions on the part of their customers and small business bankers). The rallying cry needs to be “make our small business customers run better and grow.”? What does enabling “verbs” look like??The formula is outlined below.
Figure: The Challenger Formula
To learn more about becoming a challenger and the fintechs that are part of the equation, please see Celent report, Become a Challenger in Small Business Banking: Embedding Fintech. It includes a detailed examination of Autobooks , BankiFi , FIS Business Hub, Monit (including an overview of Apiture Business Insights powered by Monit), 9Spokes , Personetics , 塔塔咨询服务公司 Customer Intelligence & Insights, and upSWOT (Acquired by Uptiq) .
Chief Marketing Officer at Phase 5 - Past Board Director & Toronto Regional Chair, Insights Association - Past Chair, Toronto CXPA
1 年Kudos Alenka on a great piece. Your focus on the + instead of the vs. is brilliant. We at Phase 5 are proud to have contributed a tiny bit to your research!