The State of the Union in Bank-FinTech Partnerships


The State of the Union in Bank-FinTech Partnerships

Bank FinTech partnerships have taken the banking industry by storm. Most banks and credit unions now consider FinTech partnerships to be crucial to their future success. But what kind of partnerships are we talking about? And what drives the success of these partnerships?

Synctera, in collaboration with Cornerstone Advisors, created a report on the "State of the Union in Bank-FinTech Partnerships", based on a survey of 290 U.S.-based senior bank and credit union executives and interviews with execs that have experience with fintech partnerships. The report highlights how bank FinTech partnerships have transitioned from “technology experiments” to now being critical components of many banks’ growth strategies.

What are the different types of bank FinTech partnerships?

There are different ways that banks can partner with FinTech companies in order to grow their overall business. A recent study by the Federal Reserve outlines three distinct types of partnerships:

Operational technology partnerships

Many banks and credit unions partner with FinTechs in order to improve their own internal systems. This may involve improving the bank’s processes, monitoring capabilities, or overall technical infrastructure. The aim of this type of partnership is typically to streamline the bank’s operations or to improve the bank’s ability to monitor fraud and comply with the necessary regulatory requirements.

Customer-oriented partnerships

In this type of partnership, banks use FinTech tools in order to improve the customer experience of their own banking products. This includes technology that improves the online account opening process, enhances their mobile banking experience, or simplifies money movement. These partnerships enable smaller banks to compete with the customer experience of larger or more technically-inclined financial institutions.

Front-end FinTech partnerships

This less common, but rapidly growing, type of bank and FinTech partnership is where FinTechs leverage pieces of the bank’s infrastructure - such as the ability to open bank accounts or issue cards - to be able to offer financial services to their customers. This type of partnership is commonly referred to as “banking as a service”.

Bank FinTech partnership activity is heating up

Based on a survey conducted in Q3 of 2021, nearly two-thirds of all banks and credit unions entered into at least one FinTech partnership over the past three years, and 35% made an investment in a FinTech.

percentage of banks entered into fintech partnership

Of those that haven’t partnered or invested in FinTechs, 37% plan to partner in 2022 and 18% expect to make an investment in a FinTech in 2022.

For banking institutions that have invested in FinTechs, the average investment has increased dramatically in recent years, particularly among banks (versus credit unions). In 2019, banks’ average investment in FinTech was $2.3 million which grew to almost $10 million in 2021. 

average amount of bank investment in fintech partnerships

FinTech partnerships may be falling short of financial institutions’ objectives

The percentage of banks that feel as though their FinTech partnerships have significantly impacted key objectives was relatively low in 2021. The biggest impacts were in “loan productivity”, where 37% of banks felt their partnership resulted in a significant impact. 

On the lower end, only 14% of banks and credit unions feel as if their FinTech partnership has made a significant impact on revenue from new products / services.

impact of bank fintech partnerships

Technology integration is a big challenge for bank FinTech partnerships

Many banks are experiencing challenges with integrating FinTech into their core and ancillary systems. What may be compounding this problem is that 81% of the banks surveyed cited a lack of API experience / maturity as a challenge when partnering with FinTechs.

challenges with bank fintech partnerships

Given the technology gap between many FinTechs and banks, in order for banks to successfully vet, negotiate, and deploy FinTech partnerships, they must develop new approaches to 1) organizational structures, 2) new product development and deployment, and 3) integration.


If you're a financial institution wanting to learn more about how you can grow revenue with Banking as a Service, speak with one of our experts today.

About the report

This report intends to identify the state of the union in Bank-FinTech partnerships—how active are financial institutions in FinTech partnerships, banks’ objectives for FinTech partnerships, the business impact of partnerships, how FIs staff for partnering, and FIs’ future plans for FinTech partnerships. The report concludes with recommendations for successful partnerships.

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