Collaboration and cooperation in the face of competition. It’s a concept that both financial institutions and fintechs must embrace to survive. In this episode of The Digital Banking Podcast, host Josh DeTar was joined by Danny Payne of Jack Henry. The two discussed how competing fintechs can share a common forum and learn from each other to meet their users’ specific needs.
Payne and DeTar also discussed digital transformation and the challenges community financial institutions face in approaching it. Payne explained why community FIs suffer from “conversion aversion” and how they can overcome it.
⚡ Fintech: where competition meets collaboration. The Association for Financial Technologies (AFT) provides a platform that enables fintech providers to collaborate and make the space more diverse and substantial. ”We celebrated our 50th anniversary at the last summit in Vancouver. I was voted on the AFT board during that session,” said Payne. “If you represent a bank or credit union, I think you can feel good knowing that there is an organization of financial technology companies that get together twice a year. Everybody puts their swords and knives away … We spend two days collaborating on what we can do and how we can understand what’s happening in the industry to make sure that we’re serving better.”
⚡ Choosing the right partners for the journey. An important but sometimes overlooked component of digital transformation is finding the right tech partners to help smooth the way. ”I always tell my kids, ‘Is this a situation where there’s short-term pain for long-term gain?’ And that’s where I think we’re at,” said Payne. “We’re at a branch in the road right now … There are fewer financial institutions today than ten or fifteen years ago. We in the financial technology world owe our best to help them continue to be successful.”
⚡ Balancing digital and in-person interaction. Advances in digital finance notwithstanding, direct human interaction will always be important. “[COVID] advanced what we had to have for our banks and credit unions on the digital side by a couple of years,” explained Payne. “I also believe what it did, though, is help us as human beings to understand how important human touch is … I talked to banks and credit unions all day, every day [during the pandemic]. We still use Zoom, Google Meet, and all that stuff. But there’s nothing like the opportunity to talk to someone in person.”