Stronger Together: How Working with Fintechs Benefits All
Global Partnerships Head, Treasury and Trade Solutions, Citi
Fintechs are often in the headlines and for good reason: over the past decade they have transformed the financial services world and changed how many of us communicate, bank, and buy goods and services — both online and offline.
Conversations between banks and fintechs have evolved over the past decade as well: progressing from the initially coined “threat” to one of partnership and collaboration — all with the end objective of adding value for clients. These fintech partnerships are one part of Citi’s broader innovation framework and they complement the extensive in-house innovation engagements that Citi runs. Such programs range from enterprise ideation/incubation programs, collaboration with both Citi Ventures as our equity investment arm as well as leading academia, and design thinking programs with core research/tech/ engineering initiatives that lead to client co-developments and R&D across our global Lab network.
Why Citi works with fintechs
The benefits of working with fintechs are well known: fintechs are smaller, less hierarchical, more agile and tend to have a niche value set. As a result, they are often able to bring solutions to market faster than a large global bank with numerous competing technology investment demands. And when partnerships are pursued that are targeted and relevant, they can help a bank adapt — and grow — to meet clients’ changing needs. Within Treasury and Trade Solutions (TTS), they have also served as a way to reinforce Citi’s continued commitment to be able to adapt its culture, embrace disruption and make innovation “truly mainstream.”
The eureka moment for Citi was the realization more than a decade ago that the most effective way to deliver value for clients was to concentrate on the bank’s strengths. By openly and honestly appraising Citi’s capabilities, it became possible to identify opportunities where collaboration with fintechs created a better or faster outcome for clients.
However, while there are plenty of clever innovations in the marketplace, Citi is careful to ensure its collaborations focus on practical challenges experienced by clients. Relevance is everything.
The benefits for fintechs
For fintechs, working with a bank is a quick way to get their solution to market and grow rapidly. Citi’s multinational client base offers an unrivalled opportunity for fintechs. By partnering with Citi, fintechs can leverage the bank’s position as a trusted adviser and its deep relationships that have been built up over many years; there is clear value in working with a partner already embedded with corporates’ finance and treasury departments. Furthermore, providing a solution in partnership — either co-branded or as a solution to which clients are referred — gives a company the Citi stamp of approval (after a rigorous risk assessment, vetting process and period of road testing).
Citi relationships with fintechs are true partnerships that add value for what are often relatively young companies: working with Citi helps fintechs to grow, mature and gain market credibility. Crucially, it also enables fintechs to overcome regulatory and procurement hurdles that can be a significant barrier to growth.