Last updated: 09 October 2017
Until recently, established enterprises and startups addressing the same customer issues saw each other as competitors. However, due to the rapid technological evolution and adoption, today it’s more important than ever before to be more open and be able to see startups as potential partners rather than a threat. Through partnerships, you’ll be able to properly harness the exciting technological and service innovations we’re witnessing every day. In a recent blog, we explored the reasons for banks and fintechs to collaborate. Now, we would like to share more about our own experience working with disruptive players and go through some of the key reasons why any business should strongly consider working with startups.
From a cultural perspective, we’ve found that startups enhance traditional approaches and reinvigorate established teams, creating room for creativity and innovation, and driving new ways of thinking. For example, in the banking and payments sector, we’re seeing next-generation technologies such as blockchain and machine learning-driven fraud prevention solutions taking center stage and progressively replacing solutions that have been in place for decades. Many startups we’ve collaborated with pride themselves on having a deep understanding of the emerging technologies and customer pain points, so engagement with their experts will prove valuable for your business and offer new insights from a different perspective.
As a global company, we have a large portfolio and work across a very wide range of industries all over the world. In contrast, startups tend to focus on one area only, which makes them more agile and able to develop and react faster to new technologies. As an established player, we can help them better understand the ecosystem, compliance requirements and potential challenges to gain scale. This means that the collaborative process can be very helpful for both parties.
For example, our strategy team regularly collaborates with fintech startups, as they can prove to be good partners to address fast-changing feature needs thanks to their focused expertise. A key priority for us is to make sure our banking and payments solutions meet new requirements related to Open Banking initiatives and new regulations such as PSD2. As part of this, we work with different types of fintech startups to ensure end-users enjoy a secure and frictionless end-to-end experience when using their preferred app to access banking services. The final result of this is that startups and our teams can address joint opportunities and benefit, as well as the end-users relying on our solutions.
We’ve also found that collaboration can be also very efficient when working on solutions for specific local market requirements. Our regional teams, for instance, create partnerships with local hubs to share knowledge and build offers for their market requirements.
New ways to market
Additionally, fintech startups can be important channel partners for large companies in the financial services sector. They offer a unique user experience and/or a combination of services which can be integrated with core technologies for bigger impact. As we recently mentioned in an article for Fintech Times (page 9): “For instance, we provide “banking as a service” platforms with proven KYC, authentication, and payment solutions, which they can integrate into a comprehensive banking offer.”
Due to their large size, enterprise corporations can offer in return better access to market opportunities for startups. In addition, they can also provide core expertise and resources, to drive startup development in their industry.
In our experience, it’s clear that collaboration between startups and larger enterprises is mutually beneficial, but for this partnership to succeed, it is crucial that both parties have a good understanding of the opportunities to be gained from successful collaboration. Startups should be no longer exclusively be seen as a threat, as many can offer new perspectives on efficiency problems and provide enhanced technical insight, hugely needed to succeed in the fast-moving world we live in. And from a startup perspective, they can benefit greatly from their collaboration with larger corporations, as they get access to wider expertise, further knowledge, and market opportunities that wouldn’t normally be available to them.
What do you think about partnerships between startups and larger enterprises? Let us know by tweeting to us @Gemalto or leaving a comment in the section below.