FinTechs apparently play a negligible role for banks in the digitalization of their lending business. Less than one in ten institutions engages in strategic partnerships with a FinTech.
14 percent of institutions have at least partially integrated FinTechs into their digital strategy for private banking. In the corporate banking sector, banks appear to be somewhat further ahead. There, at least a third rely on cooperation with startups. These are the results of a survey of 43 German universal banks, savings banks, cooperative banks, and specialist banks conducted by the Audit and consulting firm PwC.
No significant stimulus expected
According to the study, institutions also see little reason to cooperate with FinTechs so far. Stronger impulses from cooperation are expected, at most, for sales channels: One-third of respondents see it this way in the consumer credit sector, and half expect it in the mortgage sector. Overall, however, from the banks' perspective, no significant potential will arise from cooperation with FinTechs. Three-quarters of institutions explicitly expect no impact on marketing, image, or interfaces in the consumer credit business. Half of respondents deny any consequences for their product portfolio. 60 percent believe that their processes will be unaffected by potential FinTech collaborations.
"Banks have so far barely approached the topic of FinTech collaborations strategically. They apparently see no added value in learning from their counterparts' core competencies. In doing so, however, the institutions are missing out on the opportunity to differentiate themselves in the market even more specifically with innovative product offerings."
says Tomas Rederer, Partner at PwC in the Financial Services practice.
Competitive pressure: Banks see no pressure to cooperate
Credit institutions certainly see increased competitive pressure due to the entry of new competitors into the market – especially specialized FinTechs, which have so far been subject to only limited regulatory requirements. Almost one in ten respondents expects this pressure to increase further in the next three years.
“It is all the more surprising that the majority of banks seem to be reluctant to cooperate with FinTechs,”
says PwC expert Rederer. His advice:
“Banks must further develop their offerings and sharpen their digital profile, for example by building a digital partner ecosystem.”
Both sides could learn from cooperation with new market participants and thus further develop their own business model.
