Pub. 6 2018 Issue 1

www.uba.org 12 Fintech for Banks Partnering with Banks is Key to Fintech’s Future Fintech as it is more commonly known, at its most basic means using technology to deliver better financial products and services. F inancial technology, or fintech as it is more commonly known, at its most basic means using technology to deliv- er better financial products and services. In many ways, the fintech revolution has already taken place. Bank customers can use their smart phone devices to check their account sta- tus, pay bills, and deposit funds. In fact, because of technology, individuals almost never need to visit their bank branch for routine transactions. Fintech also refers to the hundreds of companies that emerged in recent years, from marketplace lenders to pure tech- nology plays. Fintechs burst on the scene in the wake of the financial crisis as an alternative to traditional banking—rais- ing expectations that they, rather than conventional banks, would drive the industry’s future. Now some of the same companies that just a few years ago were celebrated as the future of banking are struggling to withstand credit, business, and economic cycles and to secure the funding they need to grow. And a few even face more serious problems, as well as management turnover. As a result, many fintech leaders are rethinking their strategies. Some for- ward-thinking fintechs are now partner- ing with banks, instead of competing with them, or turning to time-honored banking tools like deposit-based funding of loans. Glenn Martin, Promontory Interfinancial Network, Arlington, VA