U.S. commercial banks are increasingly looking to fintechs to improve customer experience. In fact, a new Fraedom report shows that 73% of U.S. commercial banks are considering new fintech partnerships for improving either customer experience or security, and in some cases — both.

Customer experience has increasingly become a central theme in banking, both retail and commercial. This is largely due to the rise of fintechs and digital banks, which are known for using technologies and approaches like AI, ML, voice banking and gamification to their advantage and providing customers seamless, convenient and user-friendly banking services.

Banks also face competition from non-FI companies like Apple, Amazon and Facebook, among others.

At the Bank Innovation Ignite 2019 conference in Seattle last month, Alex Carriles, head of online banking at BBVA Compass, predicted that by adopting new technology, banks of the future will be “interacting with a user, advising them on what to do, giving them the best next step to take, instead of reacting to requests from the customer.”

And one way for banks to achieve this digital transformation is through fintech partnerships.

Matt Oppenheimer, co-founder & CEO of Remitly, echoed the same thought during the conference, pointing out that banks have the advantage in resources and compliance, while fintechs have the nimble technology minus the legacy cores. So, with the right partners, banks and fintechs can leverage their own strengths to create a superior customer experience.

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The Fraedom report, released in March, shows that 42% of those surveyed want to partner with a fintech to improve customer experience, while 77% want to leverage fintech partnership to strengthen security.

The report also found that services such as card management and PFM are also inspiring banks to partner with fintechs.

Kyle Ferguson, CEO at Fraedom, said in a press release:

“A lack of in-house capabilities is driving commercial banks to partner with fintechs to answer the growing demands of their customers. They are beginning to realize that these partnerships allow them to overcome shortcomings in their internal skills base and benefit from innovative technology systems without having to invest time, money and resources in their development.”

Based in London, Fraedom is a software-as-a-service technology company providing payments and transaction management solutions for financial institutions and their corporate customers. The company was acquired by card provider Visa last year for an undisclosed amount. Fraedom has managed 1.5 billion transactions through its web-based platform and supports more than 100 commercial issuing banks, and over 600,000 organizations, according to its website.