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Created on 08.11.2021

FinTech and digital banking: opportunities on the market

What developments are we seeing on the fintech market? What are the opportunities and challenges of collaboration between established financial institutions and fintechs? As part of Connecta Talk, Sandra Lienhart, CBO Retail Banking at PostFinance, shares her views and experiences.

Fintech  drive innovative solutions in the financial sector – especially in digital banking. Sandra Lienhart, CBO Retail Banking and member of the Executive Board at PostFinance, gets a read on developments on the Swiss market at Connecta-Talk. In addition to general increased willingness and confidence among customers when it comes to online and mobile banking, she also identifies a trend amongst fintechs which are focusing on specific areas and anticipating needs. “I’m thinking here of e-trading, for example, of impact investing, where you can invest in line with your personal and environmental values, of lending with a digitized process from loan application to disbursement, and of ‘buy now, pay later’”, she says in the video. She is particularly excited about the prospects for innovative solutions in this area for SME business customers.

Synergy rather than competition

During her talk, Sandra Lienhart also highlights the challenges and risks of cooperation between fintechs and established financial institutions. She explains that today there is greater focus on the potential for exploiting synergies rather than on the competitive situation. “PostFinance has a broad customer base, a hybrid business model with physical locations and financial resources, whereas fintechs, on the other hand, have the innovative, smart products and solutions,” she summarizes. Of course, we have to be aware that fintechs, as digital attackers, can cannibalize their own business model with their solutions. But for the reasons mentioned above, the advantages of cooperation are great for both parties.

Tendency towards “buy” rather than “make”

When it comes to the question of “make or buy”, she sees a tendency towards “buy”, whether through participations or by taking over products and solutions via white labelling . The main sticking points when it comes to cooperation are that PostFinance, unlike fintechs, has to manage a complex IT infrastructure and is slower moving when it comes to open banking. And what are the risks of cooperation with fintechs? On one hand, not all fintechs will survive on the market and, on the other, we can’t claim exclusive rights to the innovative solution. “When fintechs have an idea, they test it with several, sometimes competing, companies,” she explains.

You can hear the full length answers in the video in this post.

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