Banks Are Not Agile Enough for FinTech Collaborations

Banks Are Not Agile Enough for FinTech Collaborations

Burak Basel wanted to mention about the banks not being agile enough for the FinTech Collaborations and explain the factors that may affect the insufficiency. This means that the infrastructure and team of most of the banks are not ready for such a financial technological revolution. The infrastructure consists of many factors and subtopics. According to Burak Basel, there are four subtopics that are related to the insufficient infrastructure of the banks to collaborate with FinTech. These four factors are stated as following;

The People Factor: According to Basel, there are few innovative people in the bank that have authority in the decision-making process. From this, it can be stated that innovation is a key factor in the FinTech collaboration. In addition, the lack of creating a collaboration team amongst young executives, makes the collaboration difficult. The proactive approach is crucial within these kind of quick action required projects. The lack of a proactive team results with a loss instead of a win.

The Financial Factor: The successful investor says that the FinTech has got a fail-fast approach that can be only followed by banks that are ready for it. However, unfortunately there is a low percentage of banks that are ready for the fail-fast approach. Besides, only a few banks have reached their goals by achieving the desired ROI from the collaboration.

The Business Factor: Burak Basel mentions that an engagement with external experts who are responsible for mentorship and evaluation is necessary for FinTech collaborations. However, banks are not engaged enough with such experts. Moreover, few banks find it easy to onboard FinTechs, those will leave the process with win.

The Technological Factor: ‘Most of the banks are still dependent on legacy infrastructure’ says Burak Basel. Furthermore, there is a small percentage of banks that have agile systems for collaboration. Here, a technological infrastructure insufficiency which is an obstacle that is standing between the FinTech collaboration and bank is observed.

Besides these four effective external and internal factors, Basel wants to define the FinTech collaboration to enhance the clarity and understanding of the topic.

The Definition of FinTech by Burak Basel

Burak Basel states that the FinTech collaborations are able to turn the banking systems from a traditional branch-specific operation to a more digital-related process by the creation of channels such as online, social, and mobile banking systems. Thus, a more diverse and untraditional way is chosen to make transactions and bank-related moves. According to Basel, the most outstanding and well-known applications of FinTech collaborations are mobile payments, automated investment apps, cryptocurrency, and online lending. Burak Basel believes that FinTech, which takes its name from the integration of the two words ‘financial technology’, is helping the business and companies as well as the consumers to manage the finances easier. Utilized software and algorithms are used by FinTech to provide a perfect service that eases all transactional and financial actions. He ends his words by saying that the FinTech collaboration may actually take the banks upwards in terms of service quality and process simplification.