In the July – September edition of Risk & Compliance Magazine, Stratis partners Brian Stoeckert and Maria Potapov participated in a roundtable discussion on using FinTech to manage compliance and risk for financial institutions. Below is an excerpt from the discussion:
Q: In broad terms, what cost considerations should a financial institution make when determining whether to adopt a FinTech solution?
Potapov: The “FIN” component of FinTech often creates internal tension or raises the spectre of disintermediation. When it comes to FINTech, the cost and benefit may be clear enough. The harder question to answer is the vendor business viability because more often than not, the FI has a material impact on that viability. This can be explicit, if the FI has an accelerator platform to harvest FinTech solutions or enables FinTech companies to sandbox their solutions by plugging into its infrastructure. Or this can be implicit, if the FI is the beta customer or acts as a channel partner.
Stoeckert: Startups are an inherent part of FinTech. The other side of FinTech is banking the FinTech startup. FIs are always looking for new revenue opportunities, but onboarding FinTech requires a different level of sophistication. Here, the ‘cost’ is how well the FI can manage its risk and have a high level of confidence in the FinTech’s risk management from the founder to its board.
The full interview is available here.