4 Notable 2018 Bank-Fintech Partnerships
While some banks and fintech view each other as competitors, that’s not always the case. In fact, there have been a number of significant bank-fintech partnerships this year. What follows is a list of four alliances that the Bank Innovation staff found most interesting.
1. Lloyds Banking Group and Thought Machine
Core overhauling is a big undertaking, and there are plenty of well-known names like Finastra, Fiserv, and Jack Henry that work with banks on the task. But U.K.’s Lloyds Bank plc decided to go with cloud-banking company Thought Machine for its renovation project. The bank announced in November that it will enter the development and deployment phase of its massive core-revamping plan early in 2019. Lloyds even made a £11 million ($14.6 million) investment in Thought Machine, giving it a 10% stake in the company.
Thought Machine is a core banking platform that CEO Paul Taylor, a former Google engineer responsible for creating Google Voice, developed with a group of other former Google software developers.
Thought Machine’s platform, called Vault, offers retail banking products delivered through a system of smart contracts.
Comerica Bank is “dabbling in futurism,” thanks to a partnership with startup Mursion, according to Geoff Novak, Comerica’s senior technology and innovation executive.
Based in San Francisco, Mursion is a platform that uses virtual reality and AI to simulate real-world human interactions by creating human-like avatars to train professionals on handling customer interaction. Comerica will use the technology to train its employees.
“This project is specifically designed to help retail banking employees interact with customers,” Novak said.
For example, an employee would enter a virtual branch, be faced with a newly married couple and be tasked with talking to them about opening a joint account. “VR is a very effective form of learning,” he said. “The experience and training are totally immersive for the employee. So, this employee sees these avatars, and learns how to deal with real human emotions and reactions.”
3. Barclays Partners with PayPal
In an effort to expand its U.S. presence, Barclays Plc, announced a major partnership between its U.S. operations and payments company PayPal. Through the partnership, Barclay’s U.S. customers can use their PayPal digital wallet to make credit card payments.
They can also view transaction history and payment balance of their Barclays card on their PayPal dashboard. The partnership will also allow U.S. consumers to redeem Barclays reward points at merchants accepting PayPal.
“Our customers and clients live in an increasingly connected world and this is why we are working with PayPal to make services more joined up and convenient for them,” said Ashok Vaswani, Barclays U.K. CEO, said in a statement. “By joining forces, we can make it much easier for people to manage their money and payments.”
4. HSBC Bank Partners with Marstone
In October, HSBC Bank USA stepped into roboadvisor territory through a partnership with wealth management platform provider Marstone.
The product is expected to rolled out in 2019, Michael Boardman, head of wealth management at HSBC USA, told Bank Innovation at the time.The robo, called HSBC Wealth Track, will match a customer with a diversified portfolio of ETFs based on their risk tolerance. The product will be marketed to HSBC prime and superprime customers, including the bank’s Jade customers, the bank’s premium cardholders, who typically have savings ranging between $1 million to $5 million.
