A new report published today by TheCityUK, Santander UK and Shearman & Sterling sets out how greater collaboration between financial services institutions and FinTechs can smooth the path to developing innovative new digital products and services.

The UK’s #FinTech market is valued at £6.6bn, employing 61,000 people. Our report is about how to build on this success https://t.co/DuBuWfXtK8 pic.twitter.com/lHYK4wwgnf

— TheCityUK (@TheCityUK) November 20, 2017

It also underlines how important these partnerships will be in helping to strengthen the UK’s position as a world-leading FinTech centre.

The report, Transformation and innovation: a guide to partnerships between financial services institutions and FinTechs, sets out seven possible models for collaboration. Each addresses the common pitfalls and the legal issues that need to be considered to get the most of a partnership. These include intellectual property rights, regulatory compliance and data protection and privacy. This work is part of the Financial Services Trade and Investment Board FinTech programme.

Marcus Scott, Chief Operating Officer, TheCityUK, said,

“FinTech is already transforming the industry, and giving customers easier access to a greater choice of financial services, but more can be done. FinTech start-ups and incumbents need to share expertise more effectively and work together more collaboratively to create new, innovative products and services. The key to success is choosing the right collaboration model and being clear upfront about each development stage. Getting this right will unlock huge potential mutual benefits and ultimately enhance customers’ experience of their financial services.”

Nathan Bostock, Chief Executive Officer, Santander, said,

“Collaboration has the potential to transform the banking industry and fundamentally change the services we can provide for our customers – with FinTechs bringing the latest in technological expertise and banks utilising their scale and distribution networks. By focusing on how to navigate the pain points that FinTechs and established players may experience when working together and identifying a number of collaboration models, this new report should help fuel the next generation of financial services that don’t just meet but anticipate customer needs, delivering better experiences.”

Jeremy Kutner, Partner at Shearman & Sterling, said,

“The relationship between FinTech companies and financial services organisations can be challenging to navigate with both parties often unsure how to approach and establish a partnership. We hope that the seven models for collaboration we have set out in the report will provide useful insight and help steer both sides to create long-lasting mutually beneficial.”

Charlotte Crosswell (@InnFin) notes the 3 stages of how business feels about #fintech 1)suspicion, 2)acceptance & 3) embracing it. She adds the UK is leading in #fintech due to embracing it early @TheCityUK pic.twitter.com/Gk1vgwBtTD

— Anne Mannion (@AnneMannion_) November 20, 2017

The seven models for collaboration proposed in the report, each illustrated by a relevant case study, include:

• Application programming interfaces and sandboxes (case study: Mastercard)
• Hackathons and entrepreneur in residence (case study: Lloyds Banking Group)
• Start-up corporate accelerator (case study: Barclays)
• FinTech product sourcing (case study: RBS)
• FinTech joint ventures or venture builders (case study: Shell New Energies)
• Corporate venture capital (case study: Santander)
• Mergers and acquisitions (case study: Atom)

Katharine Braddick (@hmtreasury): I have read a lot of FinTech reports and this one is different because it cuts to the heart of what’s important – how to make FinTech a success https://t.co/FyrlOxBc01 pic.twitter.com/utHGVGSxtn

— TheCityUK (@TheCityUK) November 20, 2017

Source: TheCityUK