Digital transformation has been a perennial component of the corporate strategic roadmap, yet many financial services firms struggle to integrate the latest digital solutions. Perhaps more than in any other industry, they are saddled with challenges that make it not only difficult but inherently risky to adopt new tech.
Complex legacy systems, strict regulatory and compliance requirements, security concerns, and lengthy onboarding processes all stand in the way, not to mention a lack of support from overwhelmed executives and employees who are wary of more promises from overhyped digital solutions. Still, firms who are unable to keep pace with digital first-movers will be left behind, as competitors will inevitably outperform them in terms of product offerings, customer service, and cost-efficiency.
Build, buy or partner?
On the road to digital transformation, the first question is always: build, buy or partner? Building new tech in-house or buying it through an acquisition is investment-heavy and carries a greater risk that most firms can tolerate. So many companies are looking to the rapidly growing fintech sector to find a solid technology partner.
In fact, according to one recent report by PwC, almost half of all financial services companies state that fintech partnerships are fully integrated into their organization’s strategic operating model.
But assessing a potential fintech partner is no simple task. You’ve got to understand every aspect of a potential partner’s product, service, support, strategic roadmap, technical implications, pricing options, and much more.
Where to begin? Well, it’s always important to ask good, basic questions. We’ve created a guide, organized into six categories, of the most useful questions to help you assess and compare potential fintech partners to help you in your digital transformation.
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Questions about the Company
A fintech partner is more than a basic technology services provider. In the highly competitive, regulation-heavy, and quickly evolving financial services industry, it’s important to partner with companies whose strategic vision matches your own — and which has the staying power to grow with you. These questions help you assess a fintech partner’s overall maturity and health, ensuring a strong long-term fit.
- What problem did your company first set out to solve?
- What is your strategic roadmap for the next year (or five)?
- How experienced are your top leaders?
- How long do your employees stay with the company on average?
- How mature is your company/technology?
- What is the average size of one of your customers?
- Who are your most important technology partners?
- How do you ensure your team stays up to date with the latest technology?
- What is your off-boarding process when a customer leaves your services?
- What are the characteristics of your ideal customer?
- Can I speak with one of your existing customers?
- What is your net promoter score (NPS) or other metric of customer satisfaction?
Questions about the Product
The product itself is the heart and soul of a fintech provider. It’s important to understand both what their solution offers today as well as what it might look like in the future. It’s also important to consider that while the product may (or may not) meet your needs today, your own requirements might change in the future. Examining multiple use cases and evaluating the potential for growth and scalability are vital.
- What are your product’s core capabilities?
- How do your services help support our strategy and key business objectives?
- Is your platform integrated or siloed across different modules?
- How quickly can you add new data sources?
- How scalable is your technology?
- How easy is it to grow from thousands to millions of daily trades for any given customer?
- How quickly can you adapt to new web browser updates (or similar)?
- Is your product roadmap publicly available?
- What are the next big product updates you have planned?
- Do you accept ideas or requests from customers for product updates or modifications?
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Questions about Risk and Security
Ensuring your company and client data stay safe is perhaps priority number one when considering a new technology partner. It’s important to understand both what security protocols and processes a firm has in place as well as how they handle security breaches. It’s also important to assess their ability to comply with whatever regulatory requirements apply to your services and markets as an inability to do so can preclude a service provider from consideration, no matter how valuable their technology.
- What are your core security protocols?
- How do you ensure our intellectual property is protected?
- How do you handle potential security breaches?
- Which compliance frameworks do you support?
- Do you offer any security guarantees?
- What do you do with customer data?
- How do you ensure you follow all the necessary legal regulations for your product or service?
- How do you proactively stay in compliance with changing regulations?
- Do you have all the necessary licenses you need in order to operate?
Questions about Processes and Operations
You want a partner who can grow with you, so it’s a good idea to ask questions about their processes and operations to avoid some of the most common growing pains. These questions focus on two aspects: how a company maintains its systems to ensure maximal uptime (and how they handle unexpected outages) and how a company is organized to stay up to date with the latest available tech.
- How have you future-proofed your systems?
- How quickly can you update a system-wide functionality?
- How often do you evaluate new components or solutions for system-wide upgrades?
- How often do you release product updates?
- How are product updates announced and tracked?
- What sort of processes do you have in place to monitor your systems and alert you to any errors?
- What sort of down-time have you had in the past year and how do you communicate that to customers?
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Questions about Onboarding and Support
With systems as complex as fintech services, it’s important that you get the optimal onboarding and support. These questions help clarify what kinds of formal processes a company offers for support as well as how they handle customer issues. It’s also important to ask how they evaluate their own potential customers — the more they know about their key markets, the better support they’re able to provide.
- What sort of onboarding support do you offer?
- How do you evaluate potential customers to make sure it’s a good fit?
- How fast can we expect to go live after signing?
- How customizable is each installation?
- Can you provide a sandbox environment for us before we sign a deal?
- What kind of support can I expect as a customer?
- What do I do if there is an outage on a weekend or holiday?
Questions about Pricing
All questions lead to pricing. How much a technology will cost is undoubtedly important, but it’s also a good idea to always keep a broader perspective. Yes, you will want to compare the costs of similar technology providers. But you also have to consider the cost of implementation, the cost of training and employee buy-in, the cost of any potential customization you’ll need done, and the incremental costs that might be associated with gradual growth or sudden spikes in usage.
- How do you calculate pricing?
- What is included in your standard pricing?
- If we are approaching the upper limit on our usage, how will you let us know?
- How easy is it to adjust our market needs as we grow?
- Can your solution be white-labeled or otherwise repackaged?
Creating value for customers — together
Choosing a new fintech provider can be a daunting undertaking. But having the right partner (or partners) is a crucial component of joining the ranks of the most digitally superior firms in the industry.
End users, used to best-in-class digital solutions in their working and personal lives, have come to expect a seamless, self-service digital experience from their financial services providers. A good fintech provider can be the difference between stagnation (or worse, churn) and attracting new users.
Finding the right fintech partner for you may require far more than 50 questions, but we hope this list provides a way to get the conversation started. Are you ready?
About United Fintech
United Fintech offers the best fintech products on one central platform. We enable banks and financial institutions to access innovative digital technologies by partnering with engineering-led fintech companies with proven capital markets products.
We believe financial institutions can both maximize their efforts if they join forces. Are you a founder of a capital markets solution ready to grown and scale your business? Contact us to learn more.
Learn more at https://unitedfintech.com/
