Two or three years ago, “fintech” was a threatening concept that focused on disrupting established banks. “That notion has by and large gone out the window. These days, it’s about how we can collaborate,” according to Marcus Schneider, CEO of Lending Technologies Corp., a fintech company with customers in the U.S. and Switzerland that focuses on simplifying lending processes for small and medium-sized businesses.
“If we can make small-business lending more affordable, and can get small businesses to access capital in a simpler, more efficient way, we actually help the economy,” Schneider said.
Instead of taking banks’ business, fintechs today are seen as a way to help banks be more innovative and efficient, and to “address some of the digitization challenges that are out there.”
Disconnect Between Firms’ Missions
Schneider said the main obstacle established firms looking for partners need to overcome is mismatched missions. Startups can take a trial-and-error approach as they work toward their mission, but banks, “or any other large established organization for that matter, that’s a very deliberate business.” Banks in particular are “the antithesis of being an innovative risk taker.”
Lack of Support From Leaders
That means support for innovation within a bank needs to “come from the very top,” Schneider said. “To produce results in an acceptable time frame, you need the top management to take the additional challenges of their institution seriously.”