/ working with fintechs /
If the fintech team doesn’t appreciate compliance and security, move on
2. Share Interest in THE Outcome For a partnership to work, both bank and fintech have to see the value in the partnership, says Orrstown Bank’s Wallace. “If either party is carrying all the weight, the partnership should be a no-go.” Orrstown Bank, headquartered in a small town about an hour outside Harrisburg, Pa., partnered with Race Data. For Race Data, the partnership was a chance to expand its business beyond travel and retail into financial services. Race knew it would face a learning curve working with a bank, but the fintech was committed to the partnership, including becoming Service Organization Control (SOC) 2 compliant. (SOC2 is an accounting standard banks can use to help determine the security, availability, processing integrity, confidentiality, and privacy of third-party systems.) Both the bank and Race Data had “skin in the game,” and both were willing to allocate resources to making the partnership work. “This was not an experiment,” says Helm. “We all really wanted this to succeed.” Rippleshot’s Tran says that trust between the bank and fintech is critical to ensure that both parties benefit. “Our bank partner has to trust that we can deliver what we say we can deliver, and we have to trust that the bank won’t steal our intellectual property and move to another vendor.” He adds, “It takes a while to build that trust and deepen the partnership.” Shared passion for the project also is important, notes
Mercurio of Cambridge Savings Bank. The bank’s team was excited because it would hold the distinction of becoming the first bank to offer a robo advisor integrated into a retail offering. San Francisco-based start-up SigFig was excited to partner with Cambridge Savings Bank since it was its first foray into financial services. “When a fintech is trying to prove that they can work with banks, they are more willing to collaborate around custom development,” points out Mercurio.
3. Understand and Embrace Cultural Differences
When Cambridge Savings Bank partnered with SigFig, Mercurio was prepared for a potential culture clash. “We’re a 200-year-old community bank, so we knew there were going to be differences in how we do business,” he recalls. But the bank selected SigFig, in part, because it valued those differences. “From the beginning, SigFig acknowledged that while they had the product, we had the loyal customers,” he says. “They appreciated our legacy and what we brought to the partnership.” Good planning alleviated much of the stress that cultural differences can breed. For example, SigFig worked at a faster pace than the bank was used to, so Mercurio encouraged the bank team to have candid conversations with SigFig about finding a pace that was comfortable for the bank, yet kept the fintech team engaged and energized. Cambridge Savings Bank’s team also learned from the differences. “We are better at managing projects as a result of working with SigFig,” says Mercurio. Since the launch of the automated investment service, the bank created a formal project management office and hired a project management head. Part of the culture puzzle is to find common ground. Radius
enough and important enough” to attract resources, says Tran. It’s very important to understand your strategic plan and business model before embarking on a partnership, adds Tremont. “Identify the short-, mid-, and long-term plans, and evaluate how the fintech partner will solve those problems.”