Throughout Europe, banks are battling to overcome their legacy systems and recruit enough talent to drive open banking innovation. To that end, three quarters (74%) of the financial executives we surveyed for our recent report say they are in a fintech partnership or are looking for one in the next year.
But banks also know they can’t outsource all of the talent they need – it’s impractical and interim. So how can they move forward?
Tink spoke to Frank Verkerk, CDO at ABN AMRO, on why he believes a partnership strategy is core to responding faster to a changing marketplace and meeting new customer demands. But for that to succeed, the tech talent can’t all be on one side.
We decided at an early stage, that the rapid change in customer behaviour is at the core of our compass, and decided that partnering in all forms allows us to respond faster to changing demands and be more productive. I foresee that we will speed up things even more.
I’m sensing that in the short term, all the big financial institutions and retail banks are looking to deliver the most compelling customer experience – on par with the competition from digital banks and neo banks – with the personal finance management (PFM), payment requests and the multi-bank features we expect.
It’s a two-sided model. If you want to partner with fintechs and other talents, one of the things you expect is that it will increase innovation. But this will only happen if you change on the other side too. The incumbent banks who partner with fintechs need to work to become more innovative. The fintechs can't do that all by themselves.
You can talk about talent and innovation on the fintech side, but if you don't have the talent and innovation yourself, you won't recognise it. We have been on this road for four to five years. It means a big change on the side of the bank who wants to partner with fintechs. You have to change yourself to really partner.
The transformation of a bank the size of ABN AMRO takes a lot of measures. When it comes to tech development, we needed to move towards an agile and scalable approach, so we can become flexible on a large scale. This means working in smaller teams and having high mandates.
That’s one of the changes that helps us be better prepared to deliver better software ourselves. And it helps if you’ve broken down your way of working, so then you can effectively work with a fintech. I have never met a fintech with a complicated governance model.
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