Partnership Models: a lucrative future for savvy fintech firms
There’s a huge opportunity for fintech companies right now. Despite the fact that markets are evolving at a rapid rate and remain extremely competitive, fintech businesses that are prepared to enter into partnership models are in high demand.
Attitudes towards tech progress
Consultancy.UK recently reported on KMPG’s ‘Transforming the Enterprise of the Future’ study where 1/3 of the executives questioned revealed they felt unready for the inevitable technological changes to their business over the coming years. As such, a significant 88% mentioned they were “pursuing two or more concurrent organisational transformations” to ensure they were adequately prepared to manage the change.
No-one is in denial about the speed and complexity of technological evolution. However, even with this awareness, it can be difficult for firms to both deduce and implement the right strategy to deal with it.
The strategic technology firm ‘Growth Acceleration Partners’ writes in Bloomberg that “It can be a strenuous activity for any company, especially for legacy firms, businesses lacking specific technical expertise or companies with limited tech bandwidth to move to the next level.
A new approach to managing technology
A key change that companies are making is to seek partnerships with external technology companies rather than endeavour to manage their tech demands in-house. While it has typically been common for businesses to build and adapt their own technology, there are obvious drawbacks to this approach.
As new technologies are introduced, older systems become less productive and significantly costly to manage or adapt. This leads to stagnated growth for companies inhibited by ill-performing legacy systems.
By partnering with technology firms, businesses can have access to the most up to date, sophisticated equipment alongside the accompanying knowledge and expertise from their partners.
Consultancy.UK reports that “The number of firms seeking strategic partnerships has risen by 11% over [an eight year period] to 40%, while those seeking full partnerships have more than doubled to 28%.
The financial pay-off for tech partnerships
In Forbes, CEO of cyber-security business Sphere, Rita Gurevich writes that “According to a 2022 HubSpot report, “65% of organisations view partnerships as essential to their future growth,” and 50% “attribute 26% or more of their revenue to partners.” The report also found that 77% of surveyed organisations have technology partners; tech partnerships were “ranked as the most important partner type.”
Aspiring technology firms can emphasise the financial benefits of partnership models when approaching prospective companies. This is particularly prudent to businesses concerned about managing costs associated with emerging tech going forward. While a tech partnership may seem like a notable investment at the outset, the increased efficiency can yield its own gains.
Benefits for tech firms
As Gurevich points out in Forbes, technology partnership models are mutually beneficial. Effectively, “companies can focus on what they do best, blending their expertise with that of the other party to address customer pain points.”
Whether B2B or B2C, companies can work together to create meaningful and unique solutions to common problems. Tech firms may also choose to set up partnership models amongst each other, providing the two offerings are disparate enough not to be competitive.
Collaborating with other companies is also a way for tech firms to build their reputation, expertise and network within the industry.
Positioning tech firms in the marketplace
It would be unwise for firms to rely on the strength of their technology alone. While this is the core selling point, companies are looking for partners who can prove they understand the individual and evolving needs of their specific business and offer personalised and bespoke technology recommendations to meet these requirements.
If fintech leaders can show that they truly understand the individual needs of their partners, and are aligned with their business goals, they can foster the trust and mutual collaboration that is crucial to successful and long-lasting relationships. Technology will only grow in sophistication. Businesses’ needs will only get more complex. By advocating strong leadership and showing a true understanding of both sides of the coin, savvy fintechs are in an extremely strong position to storm ahead.
About Us
At FS Partnership, we have extensive global experience in helping technology companies to create a strong brand, intelligently position their offering in the marketplace and expand their client base. If you’d like to chat to our Managing Director, Chris Hopwood, about our previous work or your own specific requirements, please do get in touch for a chat
{Ends}
What our clients say about us…
“They have been invaluable, their thoughtful guidance and knack for asking the right questions have enabled me to uncover insights and solutions in a truly unique way.”
CEO – Fintech
“Having had previous experience of working with other marketing agencies, we’ve been genuinely surprised at how quickly they’ve understood the complexity of our business and been able to implement effective lead generation mechanisms. We wanted to see results quickly and so far the results have been excellent.”
David Baker, Managing Director, Aronova
Sources: