Banks and Fintech Strategic Alliance to Drive Growth

To better understand it is needed the efforts to continue growing in the face of competitive threat from major banks, challenger banks and other fintechs.

How to play and how to win: How Strategy Really Works, which describes an integrated cascade of choices which companies can use to develop their strategy time has come to review and to know how the growth is happening and expanding.

It is observed that nor do the industry planning rigorously and having absence robust plan of alliance of banks and fintechs.

Very fact, it is needed an integrated cascade of choices i.e. What is the winning aspiration(Purpose of the enterprises: guiding aspirations), Where will have to play (Right playing field: where will compete – our geographies, product categories, consumer segments, channels, vertical stages of production), How will win (Unique right to win: value proposition, competitive advantage), What capabilities must be in place (To set of capabilities required to win: reinforcing activities, specific configuration), What systems are required (Support systems: Systems, structures, and measures required to support the choices).

To win strategically and to grasp the markets and geographical coverage it is needed the alliance traditional banks and fintechs.

Where will it will to play is not only about expansion of total addressable market through geographical expansion. It's also about their choices of channels used for distribution and the products are to offer.

It is notable that the mobile apps or online via a tablet or smartphone to be the top three distribution channel increasing significantly.

By contrast, significantly fewer it is also expected that branches and call centers to be a Top Three distribution channel in 2022 and onwards compared to the pre-pandemic period.

Interestingly, it is also considering the partnerships with fintech lending platforms to be a top three distribution channel also will grow significantly.

The partnerships may represent a new distribution channel to help industry generate additional loan volume and payment system as well. Strategic choices are extremely varied and there is no single path that delivers growth.

Growth is the result of hard strategic choices that create a winning strategy and then successfully executing on that strategy. Capabilities should take in place as of strategic choices related to the capabilities.

Time has come of digital highest adoption with required capabilities. Situation demands adopted APIs for vendor relationships and partnering, end-to-end digital new account opening and digital new account on-boarding prior to or during the pandemic even looking onwards.

It is needed to possess the digital capability and robust planning to acquire as well. Adoption of personalized communications of offers using artificial intelligence is expected to grow. Other technologies such as the digital new account opening and digital auto and mortgage loans, are also expected to experience solid increases in adoption day by day.

It should also keep in mind that strategic choices are extremely varied and there is no single path that delivers growth. Growth is the result of hard strategic choices that create a winning strategy and then successfully executing on that strategy.

Having a performance culture and ensuring leadership and frontline staff are rowing their well-known ship in the same direction help ensure a strategic choices are successful.

Top performers tend to make influential choices to do some things and not others at every stage of the playing to win pour to ensure their strategy delivers unique value to create a sustainable competitive advantage.

In times of digitalization, it will establish firms operating in the financial services sector increasingly form alliances with start-up companies to satisfy the customers´ demand for rapid innovation and cope with the growing dynamics of markets.

Technology-enabled innovation challenges traditional business models of incumbent institutions (e.g., banks) and requires them to adapt swiftly to the needs of the digital age.

Systematized in a novel conceptual framework and associated with different types of alliances Banks will be in benefiting from rapid innovation without necessarily being involved in its development, while fintechs demand resources and know-how to scale in the highly regulated financial sector. It is win-win situation.

It should realize ithat partnerships don’t have to be limited to start-ups – working together with established institutions can create value.

The industry should understand how strategic alliances work and are committed to the end result will be the ones able to drive future value.