No fintech is an island: building partnerships whilst competing

Not even the most successful companies can do it alone. They forge strategic partnerships, collaborate with allies and make decisions on what to build or buy.

But how does it work when the companies you may be partnering with are also incumbents you’re trying to topple?

At our recent Fintech Showcase, Adyen’s VP of Sales Sandra Friis spoke to two of our thoroughbred companies M-KOPA president Mayur Patel and Tide CEO Oliver Prill on when to partner in fintech and how to do it successfully.

Focus on the strategy: For a company like Tide with 14 different product categories, it is simply impossible for the team to build every single product. The team chose the strategic elements they wanted to control and then found partners they could work with for the rest.

Take advantage of the gaps: M-KOPA has built the largest balance sheet in Africa, worth over $300M, by enabling people to own quality smartphones through affordable daily repayment plans. Traditional banks wouldn’t enter the market, because there was no way of underwriting it. In contrast, M-KOPA forged a new path for delivering financial services to the underserved.

Create a prenup: No one goes into a marriage wanting a divorce, but it pays to be prudent. Tide creates ‘prenups’ with partners, helping the company control the architecture of the product or service and ensuring it can be adapted to a different partner.

Leverage what you can: As a startup, it’s not always possible to be able to do everything yourself, especially in the early days. M-KOPA benefited from the enormous regulatory teams at incumbent financial institutions, whilst it built up its own regulatory and compliance teams in-house.

Ethics matter: When expanding into new markets, you can see the challenges that other fintechs and incumbents have faced. As Oliver at Tide said, part of being a fintech thoroughbred and having strong fundamentals includes being focused on managing risks and compliance. Without ethics to guide decisions, that job will be harder.

Be more like Adyen: Remember it takes time to make a difference. As Sandra said, when you’re disrupting the financial services landscape, the market doesn’t always understand what the long-term benefits will be. Build the plumbing, be laser-focused, do your homework and create strong relationships to ultimately be successful.

Watch the highlights video below to find out more:

Phoenix Court Fintech Showcase - November 2024: Partnering with incumbents