Banking Fintech

Bankers are from Mars

Bankers are from Mars – the three Cs of fintech partnerships. Main image: Katrevich Valeriy,
Written by JP Nicols

JP Nicols argues the case for better relations between banks and fintech companies, and encourages the learning of the three Cs of fintech partnerships.

It’s not news here, or anywhere else, but bankers and fintech entrepreneurs are from different planets. They’re just wired differently. Just a few years ago, all of the fintech companies wanted to put traditional financial institutions out of business. Disrupt the industry!, they said.

Despite the fact that we still have over 6,000 banks in the US alone, plus a similar number of credit unions, the industry has been disrupted. But acquiring new customers at scale is hard for fintechs, and now the talk is about the value of fintechs partnering with financial institutions instead of trying to put them out of business. This isn’t necessarily easier, it’s just a different kind of hard.

Many have focused on technology integration, getting new apps and systems to work with banks’ ageing technology infrastructure. The technology-driven nature of many new innovations makes this necessary, but it’s not sufficient. Successful partnerships between fintech companies and financial institutions need to go beyond technology integration to address these three elements:

The three Cs of bank/fintech partnerships


Building out an internal innovation team isn’t cheap. That’s why so few FIs have them, and why an increasing number are adding what I call ‘And-I’s‘ – employees with “and innovation” tacked on as an additional responsibility to their existing job titles.

Banks and credit unions are recognising the increasingly urgent need to update their products and processes to stay relevant with their customers and members, but searching for, evaluating and vetting potential partners takes a lot of time and money too.

Often overlooked is the cost of an inefficient innovation process carried out part-time by inexperienced people. Common traps include devoting too much time to planning and defining user requirements, and not enough time actually testing new ideas; and pursuing a random collection of “interesting” projects that don’t tie in to the organisation’s strategic priorities.


Most senior executives at financial institutions have spent at least part of their career in a lending role, where they needed to make the right decision just about 99% of the time over the long run. Entrepreneurs experiment with new ideas with an aim to fail fast and fail cheaply, because each iteration and pivot gets them closer to the right answer in the market. The venture capitalists investing in these companies know that close to half (or more) of them will fail.

Most banks and credit unions aren’t going to be leaders in product innovation, so partnering with more nimble fintech companies makes sense. Yet, partnering takes more than simple introductions between two different parties with vastly different approaches. Successful partnership requires FIs to address their own culture to create space inside their own organisations that embraces change. Fintech companies need to understand the conservative nature of their potential FI customers and adjust their sales and development processes accordingly.


Fintech companies also need to understand that the “move fast and break things” ethos of Silicon Valley doesn’t work inside a highly regulated environment. Every new solution, no matter how cool the technology, has to be compliant if it’s going to be used by a traditional financial institution. There is simply no other option.

At the same time, FIs need to recognise that regulation is always going to lag innovation, and they must take a more proactive approach in trying new ideas. The most innovative banks, credit unions and fintech companies all have proactive relationships with regulators to try new ideas that will still be compliant. Choosing to sit on the sidelines out of fear is not an effective risk management strategy.

Improving interplanetary relations

Yes, bankers and fintech entrepreneurs are from different planets, and I’ll leave it up to you to decide which ones have more inhabitants on Uranus. It’s time to improve interplanetary relations. Bankers learn about the five Cs of credit in their first days of training. Perhaps it’s time they learned the three Cs of fintech partnerships.

READ NEXT: Rise of the And-I’s

– This article is reproduced with kind permission. Some minor changes have been made to reflect BankNXT style considerations. Read more here. Main image: Katrevich Valeriy,

About the author

JP Nicols

JP Nicols has been internationally recognized as a leading voice for innovation, strategy and leadership, and his work has been featured in some of the industry’s top publications and conferences.A former senior bank executive, he is Managing Director of the FinTech Forge, and founder of the Bank Innovators Council which is now a part of Next Money, a global community committed to reinventing financial services through design, innovation and entrepreneurship.

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