Brendan Gilmore, Managing Director of BPG Strategy, discusses the interplay between fintech innovation and traditional banking.
Drawing from two decades in the banking industry and eight years advising fintechs, he provides a nuanced view of selling into financial services, the cultural and operational barriers faced by fintech vendors, and the evolving demands of banks.
Covering digital transformation, AI, embedded finance, partnerships, decision-making in large institutions, and strategies for navigating complex financial ecosystems, the conversation offers pragmatic insights for technology providers aiming to gain traction within financial services.
Find out more about BPG Strategy-> Here.
Key Take Aways
- Bridging the gap between legacy and fintech: Traditional banks and fintechs operate under vastly different paradigms. Bridging these worlds requires deep understanding of both.
- Complexity in financial services: The sector is fragmented across numerous verticals—retail, corporate, challenger banks, fintechs, private equity, wealth, and insurance—each with unique cultures and challenges.
- Understanding bank drivers is critical: Banks are often driven by preservation of the status quo, net interest margin optimisation, regulatory compliance, and digital modernisation.
- Selling to banks requires a tailored approach: Success depends on aligning with individual stakeholder concerns—CROs focus on risk, CFOs on cost, CTOs on technology integrity, etc.
- Decision-making in banks is consensus-based: Exco-level buy-in is essential, and clear, concise communication tools (e.g. a 1–2 page summary) are vital for internal advocacy.
- Large vs. small bank dynamics: Larger banks are modular, risk-averse and slow-moving. Smaller institutions are leaner, more agile, but often less sophisticated and more dependent on full-stack solutions.
- Collections should be reframed as a revenue opportunity: Presenting collections improvements as customer retention or acquisition cost reduction strategies increases C-suite appeal.
- Pipeline prediction is unreliable: Bank sales cycles are event-driven and unpredictable; being market-ready and front-of-mind is more effective than traditional pipeline management.
- Strategic patience is essential: Sales timelines are governed by internal politics, budget cycles, and external regulatory triggers—not vendor urgency.
- Partnership ecosystems are increasingly critical: Banks favour vendors with pre-integrated ecosystems across data providers and tech stacks to reduce complexity.
- Fintech accelerators and early-stage partnerships: Working with early-stage fintechs can offer learning and future commercial opportunities despite lower short-term revenues.
- Bank inertia is systemic: Banks tend to act only after regulatory fines or high-profile failures, reinforcing the need for strategic persistence from vendors.
Innovation
- Embedded Lending: Fintechs are developing point-of-need credit offerings, enabling seamless funding without leaving the customer journey.
- AI in Credit Applications: Automation is replacing analyst-driven onboarding through intelligent bots that iteratively collect required documentation.
- Open Banking & AI Synergy: AI bots optimising personal finances via open banking could disrupt banks’ current account funding models.
- Dynamic KYC Integration: Real-time, modular KYC solutions need to match the technological maturity of target institutions to be effective.
- AI-Driven Personal Finance: A future of “perfect information” for all parties may radically compress and simplify processes like mortgage applications.
Key Statistics
- No explicit numerical statistics or data points were cited in the interview.
Key Discussion Points
- The banking ecosystem is segmented and culturally diverse—solutions must align with sector-specific needs.
- Banks focus heavily on preserving operational continuity; 70–80% of their efforts are aimed at maintaining the status quo.
- Customer expectations and compliance (e.g. FCA Consumer Duty) are pushing banks to modernise.
- Large banks pursue modular optimisation; smaller banks often seek full end-to-end transformation.
- C-suite alignment is required for technology adoption; each executive views value through a distinct lens.
- Collections innovation should focus on customer lifetime value and retention rather than cost-cutting.
- Effective sales materials are short, stakeholder-specific, and focused on institutional impact.
- Event-driven sales (e.g. fines, new leadership) are more effective than proactive pitches alone.
- Early-stage fintech partnerships can provide regulatory insight and operational learnings.
- Banks tend to “hunt in packs”—securing one large client can unlock others.
- Strategic investments and partial acquisitions by banks (e.g. NatWest and Yonder) are increasingly common.
- Growing ecosystems demand “promiscuous partnerships” to align with varying bank infrastructures and contracts.
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