Ponce Bank N.A. in Bronx, New York, has had fintech partnerships fail because a third party wants to maintain customer data or oversee transactions. Tussles over who owns a bank’s customers run deep, because no bank wants to jeopardize its hard-won customer relationships, says Carlos Naudon, president and CEO of the $3.6 billion-asset community bank.
He is convinced that for any bank entering a fintech relationship, a frank discussion about who owns the customer data is an important first step.
“If it’s the bank’s customer, then you have to have the data,” he says. “Remember, you’re using the fintech as a delivery vehicle, but at the end of the day, it’s your customer.”
This and other aspects of how to manage fintech partnerships are of increasing concern, because so many of these relationships sour.
While statistics vary, Wayne Miller, chief innovation officer at ICBA, estimates that roughly 60% of bank-fintech partnerships either fail operationally or seriously underperform expectations.
Even with such a spotty track record, the pace at which new fintech relationships are forming is getting attention. According to Cornerstone Advisors, 57% of banks have already partnered with at least one fintech and 45% planned to move deeper into fintech relationships in 2026.
Success takes effort. The good news is that as the number of fintech–community bank relationships grows, the breadth of real-life experiences with what works and what doesn’t is growing, too.
Below are eight ways to increase the odds that your fintech partnerships will flourish.
1. How to choose a fintech partner for community banks
Betty Campiz, Ponce Bank’s executive vice president and chief banking officer, warns against falling for impressive new technologies that might not be a good fit. Instead of pursuing the latest and greatest, she recommends starting with a distinct business problem and then searching for appropriate solutions.
“Knowing your ‘why’ is what leads to the right selection of a fintech partner,” she says.
In addition, Campiz says beginning with a well-defined need makes the exploration stages more streamlined.
“You’re asking more targeted questions, and you’re setting the right expectations up-front to drive your strategic plan forward,” she says.
John C. Gill, CEO of cfsbank in Charleroi, Pennsylvania, typically meets with participants of ICBA’s ThinkTECH Accelerator program before teaming up with those best suited to take the $775 million-asset community bank in new strategic directions.
For Gill, fintechs that are not “set” in their offerings hold the most appeal.
“We’re looking for companies that are listening to our challenges and are open to modifying or changing to help us solve them,” he says.
2. Validate core banking system fintech integration before you sign
Gill says he’s daunted by the time and expense required to integrate fintech partners into cfsbank’s core. As such, he often partners with fintechs that have chosen to operate independently of both the core and mobile banking programs.
This approach is not uncommon. Miller says partnerships “typically fail when the bank and fintech are unsuccessful integrating with the existing core or existing stack.” He expresses optimism about the increased use of application programming interfaces, which bypass the biggest hassles of integrating with a core.
Kian Sarreshteh, CEO of digital investing platform InvestiFi in Dover, Delaware, cautions against undertaking an implementation without establishing “clear expectations” for what lies ahead. He is critical of fintechs that “oversell” the ease of the transition, because reality will hit hard.
“The most important thing for getting off on the right foot with a new partnership between a fintech and a bank is to be very transparent with each other,” he says. “Be transparent about what’s within the scope of an implementation and what some of the challenges may be.”
Sarreshteh also recommends that banks enlist the relevant business leader, as well as an IT specialist, to join the implementation conversation, so a realistic statement of work can be established.
3. Use a fintech partnership due diligence checklist (including fourth-party risk)
57%
of banks have already partnered with at least one fintech
Source: Cornerstone Advisors
In June 2023, the Office of the Comptroller of the Currency, the Federal Reserve Board and the Federal Deposit Insurance Corporation updated their 2013 risk-management guidance for how banks conduct business with third parties. The guidance clarified that banks are responsible for ensuring their fintech partners comply with all regulatory demands that apply to the bank. In fact, banks now know they are responsible for fourth-party due diligence, or the conduct of their vendors’ vendors, as well.
Because they’re on the hook for actions occurring beyond their organizations’ boundaries, “banks should reserve the right to dictate how compliance responsibilities [at a fintech partner] will be managed,” says Thomas Grundy, director of U.S. regulatory consulting at Wolters Kluwer. “The bank is the regulated entity, so ultimately, the bank is accountable.”
Grundy also points out that fintechs operate with lean organization structures and limited compliance resources, and one individual might oversee numerous functions, including risk management and BSA responsibilities. For this reason, he urges bankers to insist upon an “explicit and enforceable” right to audit fintech partners’ activities.
4. Put customer data ownership and responsibilities in writing at every level
It’s essential to draw up a mutual agreement that customer relationships typically belong to the financial institution, not the fintech, according to Naudon. “Community banking relies on trust relationships,” he says. “If you give away the relationship, what have you got?”
Beyond acknowledging a community bank’s special relationship with its customers, partnerships also succeed by specifying who at each party will assume ownership for which specific aspects of a venture.
Miller believes that when it comes to deciding who within a community bank owns a fintech relationship, deep business knowledge takes precedence over other considerations.
“If I’m putting in a new lending system, clearly IT has to play a role in the integration,” he says. “But who owns everything else? [The new system] really should be owned by the lending department, because they’re the ones who are using the new technology.”
Gill agrees. “The IT people are looking at things with a different set of eyes,” he says. “They’re not looking at how does [a new product or technology] impact the customer?”
How vendor mapping strengthens fintech vendor management and prevents redundancy
Most fintechs have capabilities that even astute bankers never know exist.
For this reason, Wayne Miller, chief innovation officer for ICBA, urges community banks to attend to vendor mapping before searching out fresh solutions.
“Look at what the solutions that the vendors you’re currently working with provide,” he says. “Nine times out of 10, you’ll find some redundancy.”
As AI capabilities are rapidly added to tech stacks, the frequency with which bankers must review their existing offerings is increasing. Miller advises community bankers to match their strategic plan to their current and prospective solutions on a quarterly basis, at a bare minimum.
Visit icba.org/innovation for information on the ThinkTECH Accelerator and other initiatives.
5. Assess cultural fit to reduce fintech partnership risk
Some community bankers believe the chemistry between a bank and a fintech matters more than the winning characteristics of the actual solution. Gill defines “cultural fit” as the answer to these questions.
“Do we think we can have a relationship with you? Do you want to have a relationship with us? And are you open to our ideas?“ he says. “If you just want to sell me a product, that’s not a path I want to take.”
“Fintechs, especially startups, can have an attitude that they want to move fast and break things in order to go to market at all costs,” says Grundy. “But banks are the keepers of wealth and the builders of communities. That’s a whole different cultural mindset than what you see within the financial-technology world.”
6. Agree on ROI up front so you don't chase 'shiny object' bank–fintech relationships
45%
of banks planned to forge deeper fintech relationships in 2026
Source: Cornerstone Advisors
“More than ever, banks are focusing on the return on investment [ROI] of fintech partnerships,” says ICBA’s Miller. As community banks take this new focus to heart, fintechs are tailoring their pitches to how their solutions generate returns.
“A lightbulb goes off when the bank sees there’s an ROI clearly associated with a product,” says Cale Johnston, founder and CEO of Minneapolis-based Onsetto, a commercial banking operating platform. “For fintechs that go in with no clear ROI message, right away you’re going to lose the bank’s attention.”
Sarreshteh makes a similar point, noting that InvestiFi has created an ROI template so banks can plug in metrics, such as the number of anticipated end users, and calculate achievable returns.
“We want to avoid being a shiny object that the bank is trying to chase,” he says. “If we can both agree on the ROI model, then the fintech and bank have something tangible to march towards.”
Savvy fintechs are also working behind the scenes to improve the ROI on their products.
At Finosec in Alpharetta, Georgia, CEO and founder Zach Duke recently challenged his team to slash the time and effort their customers spend on managing IT governance by at least 50%. “When I think about ROI, it’s about how do I make it easier for the banks, and how do I take friction out of our processes,” he says.
7. Use fintech partnesrhip contract best practices (SLAs, audit rights and clear data handling)
The contract, says Grundy, is “the backbone of the [bank–fintech] relationship.”
Too often, problems arise because both parties insist upon their own contracts. “When you ask somebody to dance, who’s going to dance and who’s going to follow?” he says. “That’s a tricky question when it comes to banks and fintechs.”
Grundy contends that because the bank is furnishing the charter for transacting business, the bank’s contract should, more often than not, be the starting point.
In any contract, ambiguity is a red flag. For this reason, Naudon views service-level agreements as a key element of a good contract.
“You have to hold fintechs accountable for what they’re trying to perform,” he says.
Campiz agrees. “Within the scope of work of your implementation with the fintech, you define all the components,” she says. “You define the resources that are part of the implementation on both ends. You define the business use case, or what you’re solving for, and you define who owns every step along the roadmap in terms of delivery and execution.”
8. Plan the exit on Day One: Renewal, termination and data transfer
All things come to an end—a lesson cfsbank learned after it partnered with a software solutions provider that then had an opportunity to work with a very large commercial bank.
“We’re a community bank, and what we need is a lot different from what the large money-center banks need,” Gill says. “If you want to chase them, you don’t want to chase us.”
The moral of the story, he concludes, is “you have to go into everything with an exit strategy.”
“Six months into the relationship, we saw that it wasn’t working and we had to part ways—and that’s OK,” Gill says. “[With fintech partnerships], you have to have a mindset that you’re never going to bat a thousand.”
How some fintechs reduce friction in third-party risk management banking
Zach Duke, CEO and founder of Finosec, shows community banks how to avoid repeating work by leveraging Finosec’s “data lives once” methodology within their governance and banking compliance software. When a community banker asks to see a demo, he first finds out what solutions the institution is already using and what problems need to be solved. He then tailors the demo accordingly.
“There’s a tendency for fintech partners to show everything,” says Duke. “My joke is that I could do an eight-hour demo of our platform. But that’s too much. ... We want to get you going as fast—and as easily—as possible.”
Some fintechs are also experimenting with ways to help community banks get to “yes” on a deal with less angst. When demoing products, InvestiFi increasingly tries to walk in a banker’s shoes by responding to pressure points, such as third-party risk management, early in the conversation.
“The more the fintech can take something like due diligence off the bank’s plate,” says Kian Sarreshteh, InvestiFi CEO, “the more successful the whole relationship will be.”