Partnering with banks is preferable to partnering with financial technology firms for payment services, according to a survey of businesses by BNY Mellon and Aite-Novarica Group.
The rapidly growing fintech sector is disrupting banks’ work in the commercial payments sector, the report found, with 62% of businesses saying they already work with a fintech provider.
However, BNY Mellon and Aite-Novarica also reported that most businesses would rather partner with a bank than with a third-party fintech company.
To help facilitate this, the report found that smaller banks were partnering with larger banks that had already vetted and established links with multiple fintech firms.
“Banks need to solve points of friction as their business customers show a greater expectation for robust, real-time capabilities,” said Isabel Schmidt, co-head of global payments at BNY Mellon. “Our experience is that clients who partner with financial institutions that are connected to fintechs and their capabilities stand a greater chance of success.”
Aite-Novarica’s Erika Baumann, author of the report, added: “The threat of disintermediation is the impetus for a lot of innovation among banks as they collaborate with fintechs on new ways to drive growth.
“This leads to a market opportunity for fintechs, as well as financial institutions that have reacted to market demand by developing robust services to fill the biggest gaps in their payment strategies.”
Almost nine in 10 (87%) of the businesses surveyed said they had invested in their own payments technology and processes.
The report — ‘The Forces Disrupting Payments’ — surveyed 790 staff at companies in North America and Europe, and is available via BNY Mellon’s website here.