# Why banks and FinTechs need to collaborate
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2018-03-27
Category: BANKING
Category URL: https://financedigest.com/category/banking
Meta Title: Collaboration between Banks and FinTechs: Seizing
Meta Description: Discover the impact of FinTech in the financial services industry and how banks can adapt to the changing landscape. Circle's MD of Europe shares insights.
URL: https://financedigest.com/why-banks-and-fintechs-need-to-collaboratehtml

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_**Marieke Flament**, MD of Europe at_ [_Circle_](https://circle.com/) _argues that banks and FinTechs need to collaborate and innovate to seize opportunities._

![Marieke Flament](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/marieke-flament-1736842888464-compressed.jpg)

Marieke Flament

For years banks have seen FinTechs as non-serious non-sustainable companies. However, FinTechs are gaining traction and scale and can’t be ignored anymore – the UK houses more billion-dollar [FinTech companies](https://www.financedigest.com/7-cyber-threats-fintech-companies-should-watch-out-for.html "7 Cyber Threats FinTech Companies Should Watch Out For") than the rest of Europe put together. Ultimately, the growth in FinTechs is disrupting the financial [services industry](https://www.financedigest.com/financial-services-industry-blazes-the-trail-for-cloud-migration-post-pandemic.html "Financial services industry blazes the trail for cloud migration post-pandemic"). Many high street banks had a monopoly across their product offering – from loans, savings, investments and financial. Those days are now a distant memory. Consumers are now comfortable [managing their finances](https://www.financedigest.com/online-banking-benefits-and-risks-of-managing-your-finances-online.html "Online banking: benefits and risks of managing your finances online") in new ways. In fact, an EY Global Consumer [Banking Survey found over half (52%) of UK banking customers](https://www.financedigest.com/the-bank-of-me-why-banks-need-to-be-totally-customer-centric.html "The bank of me – why banks need to be totally customer centric") are comfortable managing their finances solely online or by mobile. The same survey found 37% of banking customers have used non-bank providers in the last year for both core banking [products](https://www.financedigest.com/insurance-products-growing-in-importance-in-2021-and-beyond.html "Insurance products growing in importance in 2021 and beyond") and other financial services products such as car loans and insurance products, and 23% of customers are considering using non-banks going forward\[1\].

The [evolution of banks in a digital revolution](https://www.financedigest.com/evolution-not-revolution-digital-transformation-today.html "EVOLUTION, NOT REVOLUTION: Digital transformation today") has not happened as quickly as other industries. Unlike the retail and entertainment industries where software has driven disruption, the financial [sector](https://www.financedigest.com/time-to-act-as-cybercriminals-hot-on-the-heels-of-finance-sector.html "Time to act as cybercriminals hot on the heels of finance sector") has taken a slower approach to change. As a result of the technology evolution, the ecosystem is however evolving and we need to re-think roles and collaboration. [FinTech companies have entered the frame and leverage new technologies](https://www.financedigest.com/financial-technology-fintech-how-to-navigate-the-latest-trends-and-innovations.html "Financial Technology (FinTech): How to Navigate the Latest Trends and Innovations") such as blockchain, AI, Machine learning. Furthermore, machine-learning technology is helping people make fast, better and more accurate decisions taking the human bias out of any decision making. FinTech companies are also very good at getting [innovations faster to markets because of their digital](https://www.financedigest.com/the-cellular-imaging-market-to-show-an-inclination-towards-digitized-innovation.html "The Cellular Imaging Market to show an inclination towards digitized innovation") first culture and fast development cycles. At Circle, for example, our app gets new developments every week, several times a week.

There will most likely always be a [need to work alongside banks](https://www.financedigest.com/banks-need-to-become-a-lifestyle-brand.html "Banks need to become a lifestyle brand") who have liquidity, large customer bases, decades of experience in dealing with industry regulation. For example, Circle has worked with [banks and regulators to enable its launch](https://www.financedigest.com/exclusive-china-regulator-launches-new-probe-into-banks-property-loan-exposure-sources.html "Exclusive-China regulator launches new probe into banks’ property loan exposure – sources"), Circle has been committed to developing technology that transforms financial services. Central to our development we have been placing the customer at the heart of our [value position](https://www.financedigest.com/benign-positional-vertigo-treatment-market-is-pegged-to-witness-sound-growth-in-terms-of-value.html "Benign Positional Vertigo Treatment Market Is Pegged To Witness Sound Growth In Terms Of Value") – we want to create a world where consumers can transact with one another in the currency of their choice instantly, globally, securely, and for free.

It would be premature to suggest that FinTech will eliminate traditional, institutional [banks in the future](https://www.financedigest.com/what-is-the-future-of-banking-in-the-metaverse.html "What is the future of banking in the metaverse?"). Banks will most likely remain part of the fabric of the international banking sector for [decades to come](https://www.financedigest.com/global-hid-ballast-market-expected-to-decline-with-a-cagr-of-9-8-in-the-coming-decade.html "Global HID Ballast Market Expected to Decline with a CAGR of -9.8% in the Coming Decade"). However, [FinTech will continue](https://www.financedigest.com/the-fintech-digital-revolution-will-continue-in-2022.html "The Fintech Digital Revolution Will Continue in 2022") to disrupt the sector. Accordingly, it is up to traditional [banks to become](https://www.financedigest.com/becoming-more-than-a-bank-adding-value-through-financial-solutions-as-a-service.html "Becoming more than a bank: adding value through financial solutions as-a-service") more agile and flexible. Traditional banks may begin to take on more of a FinTech form, offering [customers some of the services](https://www.financedigest.com/transforming-to-customer-centric-service-in-financial-services.html "Transforming to customer centric service in Financial Services") that helped make FinTech organisations so popular in the first place.

To truly innovate, we believe it is vital to [move away](https://www.financedigest.com/exclusive-eu-to-move-away-from-emergency-phase-of-covid-pandemic-document.html "Exclusive-EU to move away from emergency phase of COVID pandemic – document") from the historical opinion from banks that FinTechs are “competition”. Instead traditional [banks and FinTechs should coexist and collaborate](https://www.financedigest.com/why-open-banking-heralds-a-new-era-of-ecommerce-merchant-and-bank-collaboration.html "Why Open Banking Heralds a New Era of eCommerce Merchant and Bank Collaboration"), playing to each of their strengths will ensure a win for all and ultimately drive better products for the end-customer.

[_Circle_](https://circle.com/) _is a free mobile social payment app, available on iOS/imessage and Android and the web. It simplifies mobile payments, ensuring you can send and receive money instantly and for free using your friend’s [email address](https://www.financedigest.com/how-to-create-a-professional-email-address.html "How to Create a Professional Email Address") or mobile number whether they are in the UK, Europe or America._

\[1\] http://www.ey.com/uk/en/newsroom/news-releases/16-09-26—digital-banking-increasingly-popular-but-almost-half-of-uk-customers-still-want-face-to-face-contact


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