Fintechs can provide better design capabilities, improved customer experience, research states
Financial institutions are making fintech partnerships a key priority in 2020, according to a new study from Cornerstone Advisors. In What’s Going On In Banking 2020: Outlook for a New Decade, 65% of banks and 76% of credit unions say these partnerships will be an important part of their business strategies this year. These numbers represent an increase from 49% and 60%, respectively, in 2019.
Among eight areas in which surveyed institutions plan to partner with fintechs, both banks and credit unions ranked new products and payments highest.
“Banks and credit unions are acknowledging that fintechs often have better design capabilities than what exists at banks or their major industry vendors,” Cornerstone Advisors President and co-founder Steve Williams says in the report. “They see partnering as very much a chance to ‘bolt in’ a better customer experience to their legacy back end in a time frame that can allow them to stay competitive.”
The annual What’s Going On In Banking study explores how senior executives from 300 U.S.-based mid-size banks and credit unions are prioritizing their technology initiatives and spending.
Other select study findings include:
- Cloud computing and application programming interfaces top of the list of emerging technologies banks plan to deploy in 2020.
- Digital account opening remains a top focus for new and replacement systems in 2020.
- Enhancing commercial online and mobile banking capabilities are planned by an increasing percentage of institutions in 2020.
- The percentage of institutions planning to modify or improve lending systems is up across the board, and the commercial loan origination system is among the top five technologies slated for addition/replacement.
- Underscoring the importance of analytics to banks and credit unions, among the five technologies in the analytics category, three are up for modifications or improvements in 2020.
“2020 is likely to be a good year for the banking industry,” said Ron Shevlin, Cornerstone director of research and the report’s author. “The state of the economy is the best it’s been in a long time. Consumers are more confident in borrowing, and their improved credit scores mean they’re more credit-worthy. This scenario has earnings growth written all over it.”