More traditional banks choose to collaborate with disruptive fin-tech firms
The superfast growing fin-tech industry is one that has been considered disruptive to the traditional banking sector. However, with demand for the services younger FinTech ‘disruptors’ offer proving popular, more traditional, older banks are adopting a new outlook on the young financial services entrants.
Collaboration between FinTech
disruptors and well-known banks and finance firms has become a fast-growing
trend – and its one Chairman and Founder of private equity firm Finstar
Financial Group, Oleg Boyko has been anticipating Bank – Fintech
During 2018 Boyko shared his views
that collaboration between traditional banks and the FinTech
industry would offer the best outcome for everyone; older banks
with entrenched methods could incorporate new technology to become more
inclusive and acceptable to millennials expectations. And vice versa global
fintech companies are in need of traditional banks; the younger start-ups
improve their reputation among older bank users, gain entrance into a proven
regulatory environment and also learn some important lessons from banks for
whom that experience was often hard won!
Boyko’s business supports FinTech technologies
International businessman Boyko
isn’t just vocal in his support of the startup FinTech industry. In 2017 his
company Finstar Financial Group announced a $150 million 5-year plan for investment in new FinTech startups and its own in-house research and
development of financial technology.
In an interview with FSTech,
finance-focused Oleg Boyko outlined details of the kind of FinTech startups the
fund would be interested in.
“Finstar will maintain its focus
on transformational financial services platforms and businesses. We will look
more broadly at our investment thesis and aside from the core focus on FinTech
and InsureTech, we will also seek FinTech-enabling models within realms of AI,
data science, AdTech and MarTech,” Boyko said.
Finstar’s Chairman Oleg Boyko’s
bank and Fintech startups interest is clear and its evident more well-known
businessmen are in agreement with him. In addition to that, more financial
services firms are also highlighting their positive view on collaboration
between the two elements of the same industry, in line with Boyko.
“The key to successful product
development lies in the definition of the market problem. A successful product
is always a solution you designed to address that market problem,” Watson said.
He added that some FinTech, AI startups could be used as enablers for firms
like Deutsche Bank to provide more inclusive services to a broader range of
That’s in line with Oleg Boyko’s
business view of how and why FinTech startups and traditional banks should
Bank and FinTech collaborations
Support for closer working
relationships between the two different aspects of the financial services
industry has grown to such an extent, that a flurry of agreements and
partnerships between FinTech startups and traditional banks have emerged. This
increased level of partnerships and collaborations between the two spectrums of
the same sector, is exactly what businessman Boyko told Medici would happen.
United Overseas Bank, (UOB),
agreed on a number of FinTech partnerships during 2018 with companies including
E-Wallet Razer Pay and AI provider Personetics. Elsewhere, Morgan Stanley said it has streamlined the
process by which it can agree on partnerships and deals with startups.
While the fruits of the more
recent agreements will take time to become clear, VISA Europe, who embraced the
FinTech startup deal pathway in 2017, can bear witness to the potential for
success when financial services companies collaborate.
Klarna was founded in Sweden in
2005, can name VISA as one of its partners and is now a well-known bank in
Europe, providing direct payment solutions across 14 countries.
Giving more potential customers viable banking options
For many years, well-known
traditional banks found it difficult to give the unbanked the financial
services they required. Thanks to the advent of new solutions, often via
disruptive FinTech startups, the number of people without a bank account, or
current access to financial services, has fallen to 1.7 billion. That means 69%
of adults, now have the financial access and support they need, up from 62% in
2014, according to the Global Findex database.Despite that, some 31% of adults
globally still don’t have that banking access that many of them would like.
Investor Oleg Boyko, agrees,
stating that the current financial revolution will result in easier and more
affordable financial services options to even more people around the world.
“Financial services will be … an infinitely
better, smoother, more convenient experience for customers,” he told FSTech.
That has to be the goal for
everyone with a place in the financial services industry. Not only because by
providing the right services in the most secure and convenient way will help
banks attract more customers, but also because standing still while technology
evolves by so much, simply isn’t an option for any finance firm who wants to
remain relevant, in business and profitable.