Frequently, financial institutions mistakenly believe that enhancing client offerings via fintech partnerships is significantly more complex and costly than it is. Here are a number of frequent questions/concerns with answers.
Does partnering with a fintech require me to connect it to my core and/or modify my agreement with my core?
No. A common misconception is that making new tools available to clients always requires connecting to the institution's core. Many fintech partnerships create new capabilities without touching cores and also without requiring any modification to agreements with core providers.
FINSYNC does not require core connectivity. A data feed is established via aggregators (see below) and payments are facilitated by FINSYNC's own ACH system.
A fintech offering uses my client's transaction data. How do they receive it if not through the core?
Many fintechs rely on clients to enable connectivity via the same credentials they use to get their transactional data themselves. In other words, the client supplies the login credentials inside the fintech app and the data is pulled that way.
Think of apps like Mint on the retail side and accounting systems on the business side. As part of setting up their software, they connect a data feed using their login and password.
These data feeds are facilitated by technology companies commonly referred to as aggregators.
FINSYNC uses Finicity to allow a client to have automatically imported transactions for the purposes of bookkeeping. The institution does not have to do anything to facilitate the data feed.
To verify that your institution already syncs with FINSYNC, please visit https://www.finsync.com/banking-and-financing-partner-listings/
What is an aggregator?
An aggregator in the context of a fintech partnership is a software that provides connectivity to financial institution data. Some of the better known aggregators are Finicity, Plaid, MX and Yodlee/Envestnet.
To launch a new service for your clients via a fintech partnership, your institution DOES NOT have to change anything related to your core as data is provided via these channels.
FINSYNC relies on Finicity for this purpose.
Can I deploy a fintech partnership without getting my IT team involved?
Yes. Because Fintechs use aggregators for data and can facilitate payments through their own payment rails, partnerships can be deployed via marketing teams.
FINSYNC does not require IT involvement for business tools, electronic loan applications, or Lender Portal capabilities.
How fast can I implement a fintech partnership?
For reasons stated above, fintech partnerships can be deployed in days instead of months. Deployment can often involve little more than new hyperlinked text or buttons to help clients find their way to the landing page for the new partner.
FINSYNC can be deployed in days, starting with joining The FINSYNC Network.
What specific tasks does implementing a fintech partnership entail?
- Decide on pricing
- Decide on access points
- Decide on promotions
- Sign up for the service or sign partnership agreement
- Training for for a high level understanding of the product and which clients it may benefit
FINSYNC deployments typically involve business bankers, who get familiar with FINSYNC's Lender Portal and the electronic loan application process. Marketers decide where to place links and promotions for FINSYNC's Payments, Payroll and Cash Flow Management capabilities.
Which of my teams need to be involved to implement a fintech partnership?
Marketing, legal and bankers for the relevant client type are typically involved in implementation. IT professionals may be involved if the partnership requires integration.
Do I need to train my team to enable a fintech partnership?
Yes, but minimally. Fintech solutions often include explanatory and onboarding tools embedded in the product so training is more about value proposition rather than nuts and bolts of the tool.
FINSYNC provides training to business bankers about the solution and how it is preferable to fintechs who compete with financial institutions for loans, deposit accounts and other lines of revenue.
What is my time commitment to a fintech partnership?
While core providers typically want long term contracts and to charge implementation fees for connecting new capabilities, fintechs generally have friendlier terms.
FINSYNC agreements are month-to-month and do not include implementation fees nor cancelation fees.