Banks and fintechs working together

Fintechs and the major financial services have been competing against each other for a while now. But that’s not likely to be the best course of action for either of them and now they’re working together.

The panel on the latest episode of Fintech Insider News discusses a lot, including the exciting news that Barclays has bought a significant stake in fintech Marketinvoice. The fintech is known for its suite of financial solutions for SMBs.

They’ve had a very clear impact on the SMB lending space - Valentina Kristensen

Marketinvoice have created the tech and the products to start filling the vast gap in the market that exists for SMB banking. Of course there are others creating and delivering solutions, but there’s still a great deal of empty space for SMB-focused financial products.

Why buy...or sell?

Why have they relinquished that control? - Sarah Kocianski

Well with competition hotting up in the SMB banking space and Barclays standing apart from the battle for the RBS fund, the incumbent bank is in sore need to improve its own SMB offering. And Marketinvoice is a tech vendor doing things that Barclays simply isn’t able to do itself. Using the product suite available through Marketinvoice, Barclays is likely hoping to use the fintech as a customer acquisition driver and tap into the SMB banking space before losing out to competition generated by the other incumbent banks.

The thing that stopped people from being able to expand and export was the complexity of the process - Sharon O’Dea

Barclays’ relationship with Marketinvoice should prove to be a boon to the UK economy too as now SMBs will be able to grow more rapidly. Barclays have customer relationship managers across the country to deliver these products to interested parties immediately who are looking to develop. We spoke to Anil Stocker, CEO of Marketinvoice, on Barclays’ stake purchase (hear the whole interview in the podcast) and he stated outright that Marketinvoice is going to form part of Barclays’ core offering. It marks an exciting development in the SMB banking space

This is the first time ever a UK high street bank has partnered with a fintech to help SMB customers - Anil Stocker

Barclays will be in a position to refer customers to the Marketinvoice platform and eventually the incumbent bank will also fund onto the platform directly. For now the plan is for a pilot program to kickoff in some regions across the UK next year before a national rollout.

What’s next?

There’s an understandable thread of concern that this is merely the first stage of many before Barclays’ acquire the fintech.

Is this the first stage of acquisition? - Valentina Kristensen

After iZettle was recently acquired by PayPal are we seeing the start of a trend of big financial institutions snapping up promising fintechs? Buying the competition before they become big enough to matter? Probably not given that many other fintechs are thriving on their own and without incumbent cash. But it’s worth noticing that the big players in the game are starting to acquire bits and pieces of promising fintechs, if not buying them outright. It seems as though the major financial institutions are starting to see that they need to adapt to the customer landscape changes fintechs are causing. Taking on board the tech that fintechs can provide to incumbents to transform business and thrive in the digital era. On this week’s episode of Fintech Insider News, our hosts Ross Gallagher and Sarah Kocianski sat down with: Valentina Kristensen, Head of PR and Marketing at OakNorth Bank, Ryan Garner, 11:FS Jobs to be Done guru, and thought-leader, advisor, consultant and blogger, Sharon O’Dea to talk about the all the latest news in fintech. Keep an eye out for Sarah Kocianski’s report on Best in Class SMB Financial Services coming very soon to 11:FS Pulse. You can catch the full Fintech Insider discussion on the new today on the podcast here (go subscribe now, why haven’t you already?).