How Banks and FinTechs help the financial system

The relationship between banks and FinTechs has become a topic of great interest. While some may perceive them as competitors, the reality is that banks and fintechs can actually be partners, competitors, or suppliers depending on the specific context and collaboration. 

Let’s discover the various roles they play and highlight the key success factors for bank-fintech partnerships.

FinTechs, short for financial technology companies, are innovative startups or established companies that leverage technology to provide financial services. They often excel in areas such as digital payments, peer-to-peer lending, robo-advisory, blockchain solutions, and more. On the other hand, traditional banks have a long-standing presence in the financial industry, offering a wide range of services like loans, savings accounts, investment management, and financial advisory.


Banks and FinTechs can form strategic partnerships to combine their respective strengths and create innovative solutions. Banks have an extensive customer base, regulatory expertise, and deep industry knowledge. 

FinTechs, on the other hand, bring agility, technological advancements, and disruptive business models to the table. By collaborating, banks can leverage FinTechs’ capabilities to enhance their digital offerings, streamline processes, and improve customer experience. At the same time, FinTechs gain access to banks’ resources, networks, and customer trust, enabling them to scale their solutions more rapidly.


While collaboration is one aspect, banks and FinTechs can also be competitors in certain areas. FinTechs often focus on niche markets or specific financial services, challenging traditional banks’ dominance in those segments. Traditional banks need to be agile and responsive to stay competitive in the face of FinTech disruption, either by developing their own innovative solutions or by acquiring FinTech startups.


Another role that FinTechs can play is that of a supplier to banks. FinTech companies often develop cutting-edge technology solutions that can be integrated into banks’ existing infrastructure. This collaboration helps banks upgrade their systems, enhance efficiency, and provide better services to their customers. FinTech suppliers cater to banks’ specific requirements, such as cybersecurity, data analytics, AI-driven chatbots, or blockchain-based solutions. By leveraging FinTech suppliers, banks can stay at the forefront of technological advancements without having to develop everything in-house.

iFactor in partnership with Financial Institutions

iFactor offers its robust software solution that allows banks to perform faster and more detailed analysis of SMEs and large companies applying for credit, and  identify financing opportunities.

iFactor leverages alternative data sources to enhance efficiency, reduce fraud and default risks, and automate the process from sales to risk assessment to loan approval and monitoring on one single platform eliminating the intensive manual work, disordered communication (mail, phones, WhatsApp) and old style documentation (PDF, Excel, Word), speeding up the process significantly.

In just minutes, the engine will deploy to the Bank’s user all and any data about a customer business morphology as well as its portfolio of debtors and suppliers. This data is further used by our proprietary models as well as bank’s imported models to enhance decision automated support for the sales, product and the underwriting team to pre-approve or approve the customer’s request in a faster and better informed way.

Key Success Factors for Bank – FinTech Partnerships

  • Successful partnerships between banks and fintechs require a shared vision and alignment of goals. Both parties should have a clear understanding of what they aim to achieve through the collaboration and how it aligns with their overall strategies.
  • Banks and fintechs should establish open channels of communication, share information, and address any concerns or challenges promptly.
  • A successful partnership should leverage the strengths of both banks and fintechs. Banks bring their regulatory knowledge, customer base, and established infrastructure, while fintechs contribute their technological expertise, agility, and innovation.
  • The financial industry is constantly evolving, and partnerships need to be flexible and adaptable to changing market dynamics. Both banks and fintechs should be willing to adapt their strategies, products, and processes to stay relevant and meet evolving customer demands.
  • Collaborative efforts should ensure that all solutions and services offered meet the necessary legal and regulatory standards to protect both the customers and the institutions involved.
  • Banks and fintechs should foster a culture of continuous learning and improvement within their partnership. By sharing insights, analyzing data, and seeking feedback from customers, they can enhance their offerings and deliver exceptional financial services.

In conclusion, the relationship between banks and fintechs is multi-faceted, encompassing partnership, competition, and supplier dynamics. Rather than perceiving each other as adversaries, banks and fintechs can harness the strengths of both sides to drive innovation, improve customer experience, and shape the future of finance.

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