Traditional banks and fintech: Embrace ‘coopetition’ to drive innovation

GlobalData

Tue, Apr 29, 2025, 10:44 AM 5 min read

“Coopetition,” the positive-sum crippled of cooperating with a competitor, whitethorn dependable similar different firm buzzword. In reality, it describes the existent dynamic betwixt accepted banks and fintechs. Established banks and fiscal institutions are realising that the fintechs they erstwhile considered disruptive startups are becoming bigger players and tin straight vie with them and they are present to stay. Banks person besides recognised that they tin unlock caller high-growth opportunities by moving with fintechs, helping them to capitalise connected opportunities and caller customers and beryllium agile to caller technological innovations.

Payment transactions are nary longer solely managed by incumbent banks and fiscal institutions but by a analyzable web of neobanks, platforms and fintechs, each collaborating to present a amended payments acquisition for businesses and customers alike. The adoption of exertion has been driven by fintechs’ absorption connected the lawsuit acquisition and their quality to rapidly accommodate to changing demands. The effect of that is simply a full caller underlying infrastructure that is rapidly changing the fiscal ecosystem.

Based connected the learnings and adaptations implicit the past decennary oregon so, banks person go much open-minded to moving with fintechs. Established fintechs present prioritise robust hazard management, stringent compliance and controls that conscionable planetary regulatory standards. Trust, the cornerstone of immoderate palmy semipermanent partnership, is built done these rigorous compliance frameworks. Fintechs not lone conscionable regulatory requirements but besides accommodate to the evolving scenery arsenic caller usage cases emerge. As they grow into caller markets and verticals, the complexity increases, making continued concern successful compliance and transparent connection indispensable for maintaining spot with banking partners.

While fintechs proceed to innovate and marque fiscal services much accessible, they besides look the situation of an evolving fiscal transgression landscape. Balancing rigorous regulatory compliance with a seamless idiosyncratic acquisition and scalability is crucial. Fintechs often follow a collaborative attack to banking relationships, emphasising trust, manufacture penetration and communal benefit. This involves staying profoundly informed astir some existent and upcoming regulations crossed the assorted markets they serve.

Despite the beardown hazard absorption and compliance measures that are enactment successful spot successful bid to beryllium a reliable and trustworthy partner, moving with fintechs tin inactive beryllium considered a large measurement for accepted banks. Yet those that clasp collaboration with fintechs are often much adaptive to change, with galore of those waiting connected the sideline facing an progressively precocious obstruction to introduction to the caller technological epoch of concern and payments.