For many years, large traditional financial institutions dominated the payments sector. However, this has changed in recent years with the rise of fintech, which challenges established models and drives innovation.

As a result, banks and fintech are no longer just competitors but potential allies. Strategic payment industry partnerships between these companies can result in more modern, efficient, and scalable solutions that meet the market’s growing demands.

Opportunities in payment industry partnerships

The collaboration between banks and fintech can unlock a wealth of opportunities, allowing them to combine regulatory expertise and banking infrastructure with the agility and innovation of startups. Some of the key benefits include:

Acceleration of digital transformation

Partnerships in the payments industry have been key to accelerating the digitalization of financial services. Integrating technologies such as artificial intelligence enables more effective personalization of financial products and services, optimizes liquidity management, and supports corporate clients’ growth plans.

Adoption of APIs for integrated services 

APIs have become essential to offering integrated financial services and improving the customer experience. Collaboration between banks and fintech enables corporate clients to expand their reach and deliver more efficient financial solutions. 

Fintech market growth 

The global fintech market is projected to grow at a compound annual growth rate of 16.8%, reaching a value of $917.17 billion by 2032. This growth highlights the importance of payments industry partnerships for companies to remain competitive and meet customer demands for innovative digital solutions.

Partnership models in the co-creation of payment solutions

The partnership between fintech and banks has proven essential to driving innovation in the payments sector. While banks offer regulatory expertise, financial strength, and a consolidated customer base, fintech brings cutting-edge technology and agile models, accelerating modernization. This cooperation allows both parties to overcome challenges such as updating legacy systems and the need for constant innovation, resulting in more efficient, accessible solutions aligned with market demands.

There are several forms of collaboration between these institutions, each bringing specific benefits. Some standard models include:

1. Banking as a Service (BaaS) 

The BaaS model allows fintech to use banks’ infrastructure to offer financial services under their own brands. This accelerates innovation and reduces barriers to entry for new payment solutions.

2. White-label solutions 

In this model, banks provide technology to fintech that want to scale quickly. This way, startups can focus on customer experience without developing the entire infrastructure from scratch.

3. Joint ventures and investments 

Banks can invest in fintech or create joint ventures to develop innovative payment solutions. This model is an effective way to combine the security of traditional institutions with the agility of startups.

4. Open banking partnerships 

With the growing adoption of open banking, banks and fintech can share data to create personalized services and improve payment efficiency.

How to ensure success in this kind of partnership

The success of partnerships in the payment industry depends on a precise strategic alignment and the ability to adapt to market needs. Banks and fintech must collaborate effectively to turn challenges into opportunities and maximize the benefits of these alliances.

• Innovation pace and mindset: Traditional banks follow consolidated processes and take a more cautious approach, while fintech operates with agility and focuses on rapid innovation. Joint squads and open innovation programs facilitate cultural and operational integration to balance these differences. Luby facilitates this process, helping banks and fintech structure multidisciplinary teams and adopt agile methodologies to accelerate solution development without compromising governance and security.
• Regulation and compliance: The financial sector is highly regulated, and fintech often faces challenges complying with current regulations. Banks can act as facilitators, helping startups structure compliance processes from the beginning. In addition, models such as Banking-as-a-Service (BaaS) allow fintech companies to use banking licenses to accelerate their entry into the payments market without compromising compliance.
• Technological infrastructure and integration: Integration between fintech and banks often encounters legacy systems, making it challenging to implement new solutions. Open APIs and modular architectures have proven efficient alternatives to overcome this problem, promoting greater interoperability and scalability in financial services. The adoption of modern APIs and architectures can mitigate this problem.

The future of payment industry partnerships

Models such as strategic partnerships, white labeling, and joint product development allow banks and fintech to combine their best capabilities to create more efficient and innovative solutions. These initiatives have boosted competitiveness and expanded access to modern financial services, providing consumers with more integrated and agile experiences. With the advancement of open finance, new opportunities arise to develop even more connected and customer-centric solutions. 

Strategic partnerships can create more secure, scalable, and future-proof payment solutions. Luby has expertise in building these solutions, helping banks and fintech innovate without compromising security, compliance, or operational efficiency. The future of payments lies in collaboration, and those who know how to take advantage of this movement will be one step ahead in the market.

If your company wants to modernize its payment services with cutting-edge technology and a strategic approach, count on Luby to realize this vision. Talk with us!