The financial sector is continuously improving, and different companies have different standards for awarding banks. Some of the key factors that are considered by companies such as McKinsey’s or Moody’s to award different banks include digital transformation, financial inclusion, and ability to serve customers. As a fintech, we have to find banks with similar attitudes towards innovations, and across Africa, we have found quite a range of sophistication with banks. Some banks move quickly, and are excited to innovate by working with a fintech like ours. Other banks needs levels of approval and are stonewalled by government approvals.
An Attitude Towards Innovation
The first factor to look at is how the banks is already working with other fintechs and their attitudes towards cryptocurrency. Because we have a history of working with cryptocurrency, even if the specific partnership doesn’t even digital currency, the bank needs to be open-minded towards it. It is also essential to evaluate their measures for innovation, and for most banks we work directly with their digital or innovation department. In the beginning, banks or infrastructure partners might view us as competitors, but we position our partnership in way that shows them how we could actually enable them to serve their customers better.
We also look for banks with easy API integration and pre-existing SDK’s. The tech-savvy nature of the banks made it easier for us to pitch to them.
Find an Internal Champion
When we first engage with a bank, we always try to shop around for an internal champion, someone who can help us understand the preferences and requirements of the key decision makers, as well as getting the right behind-the-scenes buy-in from those decision makers. Usually the Head of Digital Banking, or Head of Innovation are vital. In other banks for example, such as GT Nigeria, they have a speciality group called fintech innovation. The departments are help create understanding within the banks for why innovation and technological services are necessary for financial organizations. The Manager of Alternative Business at Barclays has served as our internal champion. His target for revenue or number of fintechs associated with the bank as well as their KPIs motivated him for working on our behalf.
Get the Right Documents Signed
No matter how innovative a bank is, it is still a financial institution. The different documents that have to be signed by fintechs in collaboration with banks before commencing the technical aspects include service level agreements, confidentiality agreements, privacy and security agreements as well as the contracts for due diligence, commercial obligation agreements, data protection, and information security agreements. In addition to standard documents, we often often specific requirements by the Central Banks of each country. If something seems to be grid-locked, as really specific questions because more than often than not, compliance is the internal holdup.
Regional or country culture has a prominent influence on collaborations between fintechs and banks. For example Nigeria’s culture is more about business while Senegal’s culture is focused on relationships. So in the case of Senegal, it is really important for fintechs to understand how relationships can get them to the right persons in the organization. Personal interactions, especially in French, for the first few meetings are emphasized highly as compared to phone calls or conference calls. In some cases it is also necessary to translate lengthy company registration or compliance documents into the language of the business locally.
There are two reasons for banks to work with BitPesa or other Fintechs— geographical or operational. Firstly, a bank may want to expand their reach without a heavy upfront operational investment, and integration with a fintech like BitPesa, which operates in 10+ locales, can help them do that easily. Secondly, a bank may not have the capability or desire to build a specific functionality, but can adopt that feature by integrating with a fintech. Both of these approaches enable banks to grow their customers banks and remain at the cutting edge.
While it hasn’t always been easy, BitPesa now boasts of a integration bank network of over 40 banks. To learn more about how you glide past the difficulties discussed above and integrate directly with BitPesa here.