More banks are poised to increase their partnerships with financial technology (fintech) companies as a means of keeping up with changing consumer demand. This prediction was made by the head of HSBC’s retail banking and wealth management division, John Flint. Fintech firms had been seen as substitutes for more traditional banks and fierce competitors, but given the speed of technological evolution, banks are now ready to embrace them. Fintech firms were also quite eager at the time to establish their independence from banks, but the narrative is changing. “There’s mutual respect on both sides, if you look at smaller fintech firms, you can see that banks are partnering with them and that benefits both stakeholders’ needs,” John Flint said while at the Toronto Global Forum. HSBC is one of the more committed banks, having prepared $200 million for investments and potential acquisitions of fintech start-ups.
One of the bank’s most significant partnerships right now is Apple Pay. Flint revealed that though a significant amount is being paid for their service, the scope of the market is large enough to accommodate it. Their partnership with Apple cuts across different regions and platforms and they are looking for ways to expand it. The banking industry in general was slow to the tech race, as they have been scurrying to deal with the blow-back from the banking crisis for the past near decade. He asserted that banks have been caught-up with new regulations, while still paying penance for infractions during and after the recession. Flint said “it feels like our industry has woken up to the possibilities of new technology really in the last three or four years…..If there hadn’t been a crisis, I’m sure we would all have started thinking about it a lot earlier”