How Big Banks Can Benefit From Collaboration With FinTech Companies

Updated September 14, 2026

Bank collaboration with fintech companies has moved from an experiment to a strategic imperative. The customers sitting in your branches today expect the same digital experience they get from every other app on their phone. FinTech companies built those experiences first. The question for big banks is no longer whether to engage with the fintech ecosystem, but how to structure that engagement to generate measurable returns.

The good news: most fintech companies are not trying to replace banks. They are trying to solve specific problems that banks have not prioritized, and they need the scale, regulatory standing, and customer relationships that banks already own.

Key takeaways

• Bank collaboration with fintech companies gives large financial institutions access to niche innovation without the cost and timeline of building in-house.
• There are three primary partnership structures: technology purchase, co-branded integration, and white-label deployment. Each carries different risk and reward profiles.
• Regulatory scrutiny of bank-fintech partnerships has intensified. The FDIC, Federal Reserve, and OCC issued joint guidance in 2024 specifically addressing third-party risk in these arrangements.
• Identity verification and fraud prevention are now table stakes in any partnership structure. Every handoff between a bank and a fintech creates a potential fraud surface.
• Banks that treat fintech partners as true collaborators rather than vendors consistently see faster time-to-market and stronger customer retention outcomes.
• The fintech market was valued at more than $7 trillion in 2020, and that number has continued to grow. Banks that avoid the ecosystem entirely cede ground to institutions that do not.
  

The benefits of collaboration with FinTech companies

While some FinTech companies are actively looking to take market share from big banks, many others are positioned to become collaborators. FinTech companies are often startups with limited resources and small footprints. The innovation and speed that a FinTech company can bring to the table can be a perfect complement to the size and budgets that big banks have to help new solutions grow.

FinTech companies provide a variety of attributes that big banks can benefit from.

• Innovation: Big banks can benefit from innovation in products and services for niche audiences. FinTech companies often evolve from a single unique product or service offering that fills a niche need in the market that was not served by big banks. For example, peer-to-peer lending uses digital technology to connect individuals who either need to receive or send money. When these products catch on, they can become mainstream and give big banks opportunities to evolve their own offerings.
• New options: FinTech companies also develop niche solutions for mainstream audiences. For example, buy-now pay-later companies like Klarna allow people to make a purchase online, but pay over time. This wildly popular innovation appeals to millions of people who are already big bank customers.
• Improved insights and efficiency: Other FinTech companies have found ways to make common financial processes or transactions work better. For example, online notarization, online bill pay and AI-driven banking security technology can all improve the experience for big bank customers.
  

Different approaches to collaboration with FinTech Companies

Big banks may decide that they want to buy technology from a FinTech company, partner with them to deliver a combined offering, or even integrate a FinTech solution into a branded product. 

Often big banks have entire teams dedicated to backend technology, mobile and online banking, and data and information security. These teams may decide to build certain solutions themselves, but in many other cases, it makes sense to partner with a FinTech company instead. Essentially, big banks can outsource to FinTech companies that are dedicated to a particular solution.

FinTech companies can provide capabilities that can be integrated into current processes or customer experiences for an immediate improvement that does not require upkeep by the bank. For example, a bank may decide to build their own mobile app, but integrate a FinTech solution that takes pictures of checks for remote deposits.

When collaborating with FinTech companies, banks can also benefit from rapid or cutting edge innovation without investing heavily in it. FinTech companies provide access to new concepts like cryptocurrency and AI-driven investing — all exciting new solutions that unlock opportunities for banks looking to reach new customers and serve them as their needs evolve.

Creating digital transformation together

When banks create their strategies for growth in 2022 and beyond, many will find that they need FinTech partners across many parts of their B2B and B2C businesses. After two years of digital acceleration brought on by the pandemic, big banks are facing a customer base that wants more online capabilities than ever before. Working with FinTech partners can help banks bring solutions to market faster. FinTech companies can help banks meet customer expectations and set the stage for future success.

Fintech is a broad term that describes any financial company that uses technology in new ways to digitize financial services or to improve the way financial transactions and processes work. With a 2020 valuation of more than $7 trillion, global FinTech is an incredibly valuable industry.