Community banks are, and will remain, the keystone for providing consumer financial services. This is because they are responsible for maintaining the insured deposit accounts with which customers identify as the foundation of their primary financial
relationship. Nonetheless, the way banks provide services will continue to change in the coming decades, due both to technological advances and in response to demographic shifts in the US population.
Once a bank has identified financial technology projects to supplement and support its strategic plan, it should next consider how it will go about developing those projects.
Some banks have elected to develop financial technology products or services internally, either directly in the bank itself, or in an affiliate of the bank.
A bank could choose to collaborate with a third party to bring a new product to market. Potential partners may be sought out and identified by a bank itself, or a bank may find itself approached by potential partners with fintech business proposals.
(Click to see marketplace lending fintech product examples below)
The third method of MPL collaboration—technology partnership—allows banks to work with fintech partners that most closely align with the bank’s own customer base and risk tolerance. These partnerships are often win-win scenarios: banks receive access to new methods of lending and increased revenue; MPLs get access to a bank’s CMS, credibility, liquidity from its customer/depositor base and the bank’s institutional knowledge. These relationships can work in three broad ways:
A third option is for a bank to purchase an established product or invest in an established company.