From Competition to Collaboration and Co-Creation: Why FIs Need to Build Strategic Partnerships Now

By John San Filippo

A panel discussion at FinovateSpring 2025 in San Diego explored the evolving landscape of financial institutions (FIs) and their relationships with fintech companies, shifting from a competitive stance to one of collaboration and co-creation. Moderated by Pam Kaur, head of bank technology at BankTech Ventures, the panel featured insights from Lisa Gold Schier, adviser for Reading Cooperative Bank; Kevin Jacques, partner at Cota Capital; and Fabiana Montoya, director of fintech partnerships and innovation at ScotiaBank. 

(l-r) Pam Kaur, Lisa Gold Schier, Kevin Jacques, Fabina Montoya

The discussion opened with Kaur highlighting the dramatic shift in how FIs engage with fintechs, emphasizing the growing importance of strategic partnerships in reshaping the industry. “As the fintech ecosystem continues to grow, the way FIs engage with fintechs is shifting dramatically from competing with startups to embracing collaboration and co-creation, noted Kaur. “These partnerships have reshaped our industry.”

Evaluating the Partnership Approach

A foundational question addressed by Gold Schier was how financial institutions can assess whether partnering with a fintech is the right approach versus building solutions internally. She emphasized the importance of internal assessment, considering existing structures, teams, and processes. “Looking internally as to what the financial institution has in place as far as structure and team and deciding what kind of processes make most sense,” Gold Schier observed. She noted that with the multitude of fintechs available, FIs must weigh the monetary and time costs of building in-house against the speed and potential for partnership with a fintech that aligns with their culture and future direction.

“It really makes sense to look at the cost, not only from a monetary perspective, but from a time perspective and how quickly we can get there versus looking to see who else is out there that matches our culture and where we’re headed within the industry,” Gold Schier explained. Understanding the nature and requirements of the partnership is crucial in this evaluation.

Jacques, offering a perspective from corporate banking and fintech investment, echoed Gold Schier’s points on evaluating internal capabilities and time to market. Fintechs, he highlighted, often bring valuable lessons learned from working with other customers, which can significantly accelerate an FI’s journey into the market.

“Oftentimes it makes sense to go find that capability through the partner and also tap into what they’ve learned working with other customers,” Jacques stated. “Learning what they’ve already been through can sometimes help accelerate your own journey into the market.”

Montoya shared ScotiaBank’s process for aligning fintech partnerships with the bank’s strategic objectives and ensuring smooth execution. She described a “push and pull” model. The former comes from external ideas and exciting innovations that the bank seeks to integrate. The latter involves working closely with different business lines to identify their key priorities and roadmaps, then exploring innovative fintech ideas that can support those objectives. “When we’re looking at the pool model, it’s really around working with the different business lines, identifying what are some of the key priorities they have and from those roadmaps, identifying where it makes sense to explore some innovative ideas,” Montoya explained.

Navigating Challenges in Partnerships

A key challenge discussed was navigating shifts in priorities during a partnership. Gold Schier stressed that this is a common occurrence and requires agility. “That’s going to happen... everybody really does need to be prepared for that,” she stated. This requires FIs “to use a fintech term, be agile, be able to adjust on the fly.” She emphasized the need for clear communication with the partner, involving all relevant teams, to understand the impact of the change on timelines, goals, and metrics.

“You need to be really clear in talking with your partner about that and saying, hey, this is where we are, we know we’re heading in this direction, let’s work together, let’s bring all of the teams together on how to do this,” Gold Schier advised. A good partner will be honest about their ability to adapt, and the FI must evaluate whether to pause the project or find a way to work together through the change.

Jacques added the investor perspective, noting that fintechs operate on a different, much shorter, time cycle than banks, often funded in 12 to 18-month increments. He underscored the critical importance of proactive communication with fintech partners when scope or timing change, as delays can have a significant impact on a smaller company. “Even if the change isn’t major, you’re changing direction on the project. But there’s a resource constraint and it’s going to take one or two quarters longer. That can be a very big deal to your little, tiny fintech partner,” Jacques warned. He stressed, “communicate proactively, be up front. The minute you know, if the scope or the timing is changing, let them know so they can adjust and you can mutually decide whether it still makes sense or not.”

Gold Schier added a crucial point from the fintech side: the need for honesty. Fintechs, while eager to please, should be upfront about what they can and cannot do, she said. “If you can’t do it, say that. I know a lot of fintechs that I’ve worked with are really eager and say yeah, we can do that. And you then shift your whole technology team in order to move to something different. And that can really throw a fintech back and cost quite a bit of money,” Gold Schier explained.

Jacques added, “Be honest with your customers.”

Montoya highlighted that banks are not simply deciding between “buy versus build” but are also considering “buy, build, wait.” She explained that banks might assess emerging technologies for years before fully committing, citing the example of blockchain. Understanding this assessment cycle is crucial for aligning expectations between banks and fintechs.

Improving Communication and Identifying Risks

The conversation shifted to how fintechs can improve communication with FIs. Jacques stated that just as fintechs expect transparency from FIs, they must also embody that behavior. He advised FIs, especially smaller ones, to do their homework on potential fintech partners. He noted there are several services that FIs can use as resources to find fintechs that have successfully partnered with similar institutions. “Both parties have to be honest and open to kind of get that good match up front,” he concluded.

Montoya shared warning signs she looks for when evaluating fintech partnerships. A critical question is whether a fintech is “tier one ready.” She explained that for a large bank like ScotiaBank, moving from established technology providers to a younger company requires a unique and significant value proposition that justifies the risk. Factors considered include the fintech’s investors, their track record with other banks, and transparency in communication from the initial meetings. She also noted the importance of a fintech having updated information in research databases that FIs use for initial screening.

Jacques added that FIs should not only check with the fintech’s investors but also with other VCs who might be familiar with the investors or the startup itself. He pointed out that the current environment of tightening venture funding makes assessing a fintech’s longevity even more critical. He added that FIs often inquire about fintechs they are considering partnering with, and investors have a duty to share what they know. Therefore, “do your homework, do your diligence, make sure they’re going to be a long run.”

Build vs. Buy vs. Partner

On the build-versus-buy decision, Gold Schier noted that for smaller FIs, it’s often more about “build through the partnership” rather than outright buying a company due to capital constraints. If an FI does consider buying, “it’s got to be something rare here. It lines up with the strategy at the bank and where you’re heading not right now, but five years from now where you want to be,” she stated. Integrating the acquired technology into the existing environment is also a significant consideration.

Montoya added that at a large FI like ScotiaBank, core functions tend to remain in-house. Partnerships are explored for non-core areas that can augment their offerings without requiring significant internal investment. She also pointed out that fintechs can bring valuable external data assets that enrich the bank’s data and wouldn’t necessarily be built internally. “Those data assets that you could bring ... that can actually be a great asset for us that we might not necessarily be building within our walls,” Montoya said.

Gold Schier cautioned that while some community FIs have looked at buying and building on top, “it takes a lot of time in order to do that and the market shifts.” She added, “You need to look hard and fast if you are going down that path as to the long-term implications of doing that.”