Digital banking has raised the bar on speed, experience, and security. As a result, banks increasingly partner with fintechs to launch new capabilities faster than they could build alone. Yet the industry’s track record is mixed: one benchmark shows banks now average 9.4 fintech partners, while roughly two-thirds of partnerships still fall below expectations.
That gap matters because the stakes are high. Research cited in the same body of work suggests banks spend hundreds of millions of dollars per year on digital transformation on average, and senior leaders rank technology and digital investment among their top near-term priorities.
The core insight from practitioner interviews is straightforward: the limiting factor is rarely the technology itself. Partnerships tend to fail because people, processes, decision rights, and metrics are not designed for a shared, long-lived relationship.
What partnerships are really for (and where they concentrate)
A large survey of banks highlighted three partnership “hot zones,” each tightly linked to core banking economics:
- Payments / money movement (large share already partnered, and similarly large share planning to partner)
- Fraud and risk management
- Mobile wallet capabilities
These are not peripheral experiments. They sit at the heart of customer experience, unit economics, and trust – exactly where execution discipline matters most.
Four partnership archetypes (pick the right model before you pick the partner)
Most bank–fintech partnerships fall into one of four archetypes:
- Distribution – using a partner to reach new customer segments or channels
- Product capability – improving customer experience or extending existing offerings
- Platform / core enablement – modernizing core platforms or foundational banking components
- Operations – streamlining internal processes, automation, or data sharing
Clarity here prevents a common failure: selecting a great solution that doesn’t fit the strategic job the partnership needs to do.
The build-vs-partner decision: a seven-factor test
Before signing anything, high-performing teams run a structured decision on whether to build internally or partner. A practical seven-factor test looks like this:
- Source of value: niche/best-in-class vs. core competence that shouldn’t be outsourced
- Solution fit: quality of output and ability to tailor
- Ecosystem fit: how self-contained the use case is
- Integration depth: light integration vs. deep entanglement
- Total cost of ownership: internal costs vs. expected vendor costs over time
- Talent and capacity: need for hiring/upskilling vs. available capability
- Regulatory and partner risk: compliance burden + operational/financial stability of the partner
This test does two things: it forces strategic choices early, and it gives internal stakeholders a common language for “why this partnership.”
Why partnerships underdeliver: the failure modes across the lifecycle
Across dozens of practitioner interviews, pitfalls cluster into three phases – sourcing, implementation, and management – and the fixes are mostly operational, not technical.
1) Sourcing: “We found a fintech” isn’t a business case
Where it breaks
- The business need is vague or shifting (“innovation” rather than a measurable outcome).
- Build-vs-partner is never explicitly decided, so the partnership starts with unresolved strategic tension.
- Key decision makers aren’t aligned early, causing slow approvals and missed timing windows.
What works
- Define the use case in operational terms (target customers, journey, risk posture, and economic value).
- Align on “decision rights” and a single accountable owner on both sides.
- Agree the metrics that will prove success – before procurement begins.
2) Implementation: the hidden bottleneck is usually resourcing and governance
Where it breaks
- Implementation slows due to misalignment of people/processes more than technical integration.
- Teams underestimate the need for dedicated capacity across business, technology, legal, procurement, and risk.
- “One-size-fits-all” vendor assessments are applied to small, niche partners – dragging pace and generating unnecessary work.
- Proofs of concept drift away from outcomes and never graduate to go-live.
What works
- Right-size onboarding and assessments to the partnership’s risk and scope (fit-for-purpose procurement).
- Define PoC success criteria that directly connect to the go-live decision and operating model.
- Assign relationship ownership on the fintech side and delivery ownership on the bank side – both with clear mandates.
3) Management: partnerships fail when they become “post-go-live neglect”
Where it breaks
- No structured post-sales framework – so oversight fades and the relationship degrades.
- KPIs are unclear or misaligned, making value impossible to prove.
- Governance is missing across technical, commercial, and relationship dimensions – one of the biggest causes of partnership failure.
- The partnership doesn’t evolve, so it stops creating new value as strategy shifts.
What works
- Use a KPI stack with three layers (1) Technical (e.g., uptime, response time, incident response, security/privacy); (2) Commercial (e.g., revenue, cost savings, contractual performance); (3) Relationship / adoption (e.g., user adoption, retention, innovation velocity, market impact).
- Establish a dedicated partnership function (a small team that standardizes onboarding, sets expectations, connects stakeholders, and runs governance).
- Run a regular cadence focused on issues, performance, commercial goals, and compliance – not just status updates.
- Expand via small, well-defined releases that deepen integration over time.
The principle that separates winners: people and processes first
Partnerships often look like technology projects – but the evidence from practitioner interviews points to a different reality: they are relationships built on trust, transparency, and deep collaboration, and they require sustained engagement.
A “board-ready” checklist for bank–fintech partnerships
- What specific business outcome are we buying (revenue, cost, risk, speed)?
- Have we explicitly chosen build vs partner using structured criteria?
- Who owns the partnership end-to-end on each side?
- Are procurement and risk processes proportional to the use case’s size and risk?
- What PoC proof is required to move to production – and by when?
- What KPIs will prove value (technical, commercial, adoption/relationship)?
- What governance cadence will prevent drift after go-live?
- How will we ensure compliance is actively managed, not assumed?
- What is our plan to expand the partnership as strategy evolves?
- What would make us exit – and what is the exit plan?
