The time when banks feared fintechs has (mostly) been left behind.
Today, many banks have formed innovation arms or incubators in order to facilitate the fintech/bank relationship. However, scoring a match is still complex. What can fintech startups do, to boost their chances? TD Bank’s Julie Pukas, head of U.S. bank card and merchant services, has a few tips.
“What we would be looking for when startups come to us is obviously data security,” she said at the FemTech Leaders meetup yesterday. “So, there should be an understanding that our data security people will crawl all over your infrastructure, and you should be prepared for that.”
Having a proof of concept, with customer feedback included, is also crucial. “We need to have a clear understanding that the product provides great customer experience, and that it is safe for our customers, specifically from the privacy perspective,” Pukas added.
To be a “perfect match” for TD, fintechs should also plan on approaching the bank with a “light version” of a supplier or partner management strategy. “We need to know that your startup has enough bandwidth to work with a bigger player,” she said. Like most banks, TD has an infrastructure specifically designed to seek out fintech partnerships and make investment decisions. “It’s a special group of people that focuses on this full time, and we like to see that startups have done their due diligence and established a lighter version of such a group.”
But even all that may not be enough, if you are knocking on the wrong door, Laura Spiekerman, cofounder of API-based authentication service Alloy said yesterday. “We started to have a lot of conversations with not just banks, but a lot of other regulated fintech companies that do have a problem, but they don’t necessarily know it yet or are not yet focused on solving it,” she said yesterday. “You don’t really have much time on your side, so find banks that already know they have a problem, have spent time on it, and have people looking at it.”
To learn more about partnership strategies for fintechs, join us at Bank Innovation 2017 in San Jose. Please request your invitation here.