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Fintech: The Death of Financial Services During Pandemic

Sink or swim? Digital transformation through collaboration has never been more vital


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Change is the only constant in life. Never has this been more apparent than during the Covid-19 outbreak. In the financial services space, change is driving much-needed digital transformation and improvements to the customer journey experience.

Financial services firms are at a frontier stage compared to the developed markets of Europe, Asia and North America. Governments are now recognizing the importance of creating financial centres, not only to develop economies but also to improve the region’s standing in the world.


Fintech investment is growing at a rate of 64%, more than twice the global rate of 26%. To ensure their long-term survival, financial services firms must also tap into the growing appetite for digital solutions and take advantage of rapidly changing customer behavior to innovate their offerings. More than 70 percent of people in APAC now use smartphones, and this represents a substantial opportunity for forward thinking companies to offer more and better digital services.

Clients of investment and wealth management services are also no longer content to invest locally. They are increasingly looking for global services and access to international markets from a single provider.


If companies want to offer a global service, they need to expand their proposition and invest in technology that delivers a seamless customer journey as well as a truly global offering. But how do banks and financial institutions provide clients with products and services to reflect the ever-changing digital journey without exploding Capex and Opex?

Evolving business through collaboration

The only effective way to evolve a business, unless you are a multinational with huge resources, is through collaboration. Financial institutions must explore external partnerships to innovate, initiate technological changes and improve customer experience as digital consumption increases post-Covid-19.


Partnerships in financial services are not a new trend. Many banks has been championing collaborations with another bank. In these two decades, fintech players have evolved from disruptor status, and are now viewed as vital collaboration sources for companies eager to accelerate their digitisation.

The bank of the future

It is simply not realistic, or feasible, for banks to independently build great technology solutions across their value chains when partnerships can provide instant technology and market access to service end clients.

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The flexibility of an open model makes it easy to add new services without adding huge costs and complexity. It also means that banks and financial services firms can focus on core competencies, whether investment banking, fund management or trading, while the fintech partner supports the digitisation of the client journey.

In 2018, a survey of CEOs by PWC showed that 56% of CEOs were exploring strategic alliances or joint ventures to drive corporate growth and profitability. We expect this figure to be much higher in a post-Covid landscape.


The symbiotic relationship of collaboration

It is important to distinguish collaboration from supplier/vendor arrangements. A true collaboration delivering innovative new products, services or improved customer journey involves all parties experiencing success. It is a symbiotic relationship – each party must have ownership of their piece of the project and equal investment in a successful outcome. As the saying goes, you have got to have skin in the game to be really committed to a partnership’s success.

Models of collaboration

This utopian model of collaboration – where all parties are compensated from the revenues of success – is not a myth, as evidenced by our long-standing collaboration with Italy’s Banca Generali.


This partnership enables Banca Generali to offer best-of-breed online trading and digital services to Italian clients trading and investing autonomously, and to existing private clients through financial advisors utilising various banks’ platform and technology.

With many banks receiving unique access and distribution, the partners secure state-of-the-art products, platforms, pricing and service and full value-chain support.

Banca Generali originally had three options: build its own system, buy external services or partner with a fintech specialist. This third option was Banca Generali’s most effective and efficient route to achieve its digitisation ambitions. It was a win-win for two organisations equally committed to shared success.

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Partnerships can also be built on a hybrid model whereby a specialist fintech is brought in to execute a project. Under the hybrid model, the fintech specialist may request some compensation upfront to support the rollout work, with further returns based on growth and achieved targets made possible by the successful technology implementation.

Whether an equal-investment partnership or a hybrid model, the agreement requires extensive due diligence by both parties; it is comparable to an acquisition. A partner should be selected on its ability to deliver the right solutions, but never forget the importance of shared values.

Collaborate to survive

The first step for any company looking to digitise its business through a collaboration is to assess company strategy and recognise the areas of business that need digitisation and innovation. The second step is to come to terms with the reality that the company no longer needs to own all segments of the business. The third step is to partner with a fintech specialist to deliver the required digital innovation.


For incumbent institutions weighed down by bureaucracy and long histories of owning all aspects of the business, these steps may require a management paradigm shift. But post-Covid-19, the marketplace will undoubtedly be different, and partnerships are now inevitable for financial institutions to survive and grow. Institutions reluctant to collaborate on digital transformation will find themselves not just struggling to swim, they will be sinking to the bottom and die.

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Engr. Jenae Muller
Engineering geek. Currently working at Murray & Roberts Joburg. Former senior engineering recruiter at Group Five Engineering & Construction. Studied industrial engineering at Univ of Johannesburg. Kickass Dutch who likes tattoo. Blogging about innovations. Follow me on Linkedin www.linkedin.com/in/jenae-muller-b24147126/

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