Former enemies, FinTechs can now be a lifeline through partnerships, enabling banks to offer banking-as-a-service and embedded finance.
Many banks struggle to provide an embedded finance experience for their retail and business customers, due to outdated technology or a lack of within-bank expertise. Embedded finance is both a threat and an opportunity. Regardless of the outcome of the Brexit negotiations, FinTech will continue to play an important role in the UK economy.
The famous saying “Keep your friends close and your enemies closer” has taken a different turn in banking. The fintech newbies who were once considered enemies are now increasingly becoming collaborators, if not friends. They hold the key for traditional financial institutions to capitalize on two fast-growing trends that are reshaping banking: embedded finance and banking-as-a-service.
Many banks no longer see FinTech start-ups as competitors, but as potential partners to help build their own digital capabilities, according to new findings from Economist Impact, a division of economists. I am. However, bank executives are aware that the threat of embedded financial and BaaS services offered by non-financial companies such as technology companies and telecommunications providers is increasing.
Big tech has an advantage when it comes to regulatory compliance because they have a looser area than banks. Additionally, they can use data from various parts of their business to bankroll their financial services operations.
Big tech companies have an advantage when it comes to regulatory compliance because they have less stringent requirements than banks. They can use data from various parts of their business to fund their financial services operations.