Partnerships have enormous power, that should never be underestimated. This is especially true in the financial services sector, which is undergoing a substantial transformation as the ecosystem shifts toward partnerships rather than individual organisations. Competition is heating up and partnerships are essential for keeping ahead in a congested industry: collaborating with the leading players specialising in innovative technology, saves time and money, increases product time to market, and accelerates the company’s learning curve.
Strategic partnerships are hardly new. Companies have been merging forces for mutual benefit for decades. Partnerships may help an ambitious, growth-oriented organisation reach new consumers and develop more rapidly, opening up new avenues of innovation and allowing businesses to swiftly improve their capabilities and resources.
During a Future Processing roundtable, speakers with extensive expertise in the technology sector shared their knowledge and experiences.
Driving Long-Term Success
Fintech is growing rapidly, and part of its phenomenal development might be attributed to partnerships. While FinServ is still dominated by the old guard, the technology sector is a much younger, more open environment for individuals to create relationships and demonstrate the value of their offerings.
Irfan Khan, CEO of mmob, explained that each organisation will have different motivations and objectives for a partnership. With this in mind – they need to establish what success looks like to them from the start of a project. He added that once the strategy has been aligned between both parties, the project is set to move forward.
Ian Max Ewart, CRD Advisor at Acin, mentioned that it’s acceptable for a collaborative project to only be a transaction. Jarosław Granat, Head of Client Engagement at Future Processing, agreed with Ewart by adding that an organisation should create their vision which requires tough decisions, such as terminating a partnership with a client that no longer aligns with its strategy. Khan further supported this notion, stating that organisations need to fully comprehend what the right strategy is for the business.
Getting Onboarding Right
Partnerships have increased considerably since 2016, with the number of new partnerships globally tripling in the last three years. The move toward online activity has accelerated Fintech partnership growth across the globe. Khan explained that it is challenging to build a partnership ecosystem, yet it is the only way to revolutionise a business.
Granat believed that the opportunity to network with organisations that share the same vision is one of the fundamentals of creating meaningful partnerships. He further listed other valuable aspects, such as adding additional products or services to a business, the accessibility of talent in a volatile landscape, and the opportunity to close the skills gaps. Ewart explained the value behind partners continuously learning about one another’s business and actively recognising opportunities to improve or innovate. He stated that overcoming obstacles collaboratively, rather than in silos, is key to staying afloat in an increasingly competitive market.
The current government regulations make partnerships a lengthy process. Ewart explained that the process is not designed for rapid adoption. Khan agreed that the many levels of regulations are hindering the onboarding process, however, he further added that an organisation’s culture and attitude towards risk is a much greater factor.
Navigating Partnership Breakdowns
In addition to generating capital, establishing the appropriate partnerships is crucial for sustainability. Indeed, according to a recent PwC research report, more than 75% of CEOs ranked partnerships as essential to performance. With many partnerships taking months, if not years, to materialise, it’s no surprise that so many businesses fail – and lose significant resources in the process.
Khan explained that breakdowns in partnerships can be avoided by establishing expectations from the onset, as well as continuous stakeholder management throughout. Granat added that tough moments are inevitable, however, it is crucial to approach unforeseen situations promptly and consider all members’ feedback, whilst taking the time to fully comprehend the source of the problem. Finally, if there is a complete breakdown in the partnership, it is almost always better to mutually and respectfully part ways.
Setting the Priorities
In the past, Ewart explained, organisations that had innovation departments were badly perceived. He added that it is much more feasible for businesses to better position themselves by building lasting relationships to truly stimulate innovation through ongoing collaboration. Granat agreed that creating a culture of innovation is the key to staying competitive. Organisations are known to have too many ideas, with no set plans on how to implement and build success from them. He explained that organisations should focus on current organisational problems and build an innovation strategy around the obstacles.
Ewart and Granat both agreed that IT needs a seat at the boardroom table, to be able to understand the technology used within the business and bring new ideas to the C-Suite to stay competitive.
Looking to the Future
The consumer ecology has changed dramatically in recent years. Shifting consumer expectations, new competitors, technological developments, and increased regulatory requirements are driving existing providers to speed digital transformation and adopt new approaches.
Khan stated that the current talent shortfall and skills gap are paving the future of partnerships and collaboration. The solution of offshoring capacity aids businesses to expand globally and ensure that they comply with regional regulations when doing so. He added that the right partnership allows organisations to move into new markets and develop their service offering. Granat explained that partnerships are starting to be treated as insurance policies that businesses can rely on for assistance in areas they are not sufficient and that short-term partnerships are becoming more frequent.
Both Ewart and Granat agreed that partnerships create the opportunity for businesses to get closer to their customers, by allowing local talent to engage with consumers and provide valuable feedback to executives to innovate the CX.
Conversations around strategic cooperation are driving the ‘buy vs. build’ debate. Innovative partnerships are providing customers with the personalised, scalable solutions they have come to expect. Customers are growing more particular and knowledgeable, and the organisational infrastructure requires highly innovative next-generation technology to satisfy them. The underlying conclusion is that disruption will be a constant – organisations must embrace a collaborative approach and utilise partnerships to better serve consumers.