Partnerships / Acquisitions

Community Banks Debut FinTech Alliance

In the United States, a consortium of collaborators across FIs and FinTech firms has taken shape. Across the Pond, joint efforts among traditional finance firms and tech-driven startups eye guidelines on how to work together. Plus, new players in Arizona’s FinTech sandbox.  

Collaboration amid competition has been a hallmark of the financial services space, as traditional financial institutions (FIs) join forces with FinTech startups. To that end, news came earlier this week in the United States that a dozen community and regional banks have formed a group aimed at exploring the opportunities amid FinTech offerings.

The group, to be known as Alloy Labs Alliance, according to a press release, is being managed by FinTech Forge. The banks will pool their resources with an eye on “share opportunity,” where smaller firms will examine specific areas of focus through the formation of small working groups. The release noted that the group will help FinTech startups “shape their solutions while reducing execution risk.”

Alloy’s Julieann Thurlow, CEO of Reading Cooperative Bank, said, “Community banks play a special role in the lives of our customers, but we don’t have the same IT and innovation budgets as the big banks to capitalize on that relationship.”

According to BankingTech, Alloy also said banks that are not quite “ready to begin adopting new technology” can still link up with the alliance to share findings and learn from others.

The alliance includes a dozen firms that have between $251 million to $20 billion in assets. Among the names joining up are Citizens & Northern Bank (based in Pennsylvania), Inland Bank (Illinois) and Lincoln Savings Bank (Iowa).

Guidelines From The UK

In the United Kingdom, a number of banks and FinTech firms have been working in tandem to foster guidelines that will boost working relationships between those parties. The group includes such banks as the Royal Bank of Scotland (RBS) and Santander, and FinTech firms like The ID Co. and MarketInvoice.

The guidelines are being developed by the British Standards Institution, reports said last week. The standards seek to tackle issues that “interfere” with collaboration, make way for efforts such as FinTech firms “pitching” to banks, and provide insight into regulatory issues spanning onboarding and due diligence.

“We need to make it as easy as possible for newcomers to collaborate with the bigger players. That’s why we helped to set up the FinTech Delivery Panel, and, thanks to the guidelines published today, the industry will be able to work closer together, benefiting customers across the country,” said John Glen MP, economic secretary to the Treasury, in a press release announcing the efforts.

“We need to make it as easy as possible for newcomers to collaborate with the bigger players. That’s why we helped to set up the FinTech Delivery Panel, and, thanks to the guidelines published today, the industry will be able to work closer together, benefiting customers across the country,” said John Glen MP, economic secretary to the HM Treasury’s FinTech Sector Strategy, in a press release.

Here In The States

In the United States, sandboxes are grabbing a bit of headline space. Arizona, which launched a “sandbox” earlier this year, said last week that there is a new participant in that FinTech-driven initiative. That takes the total number of firms in the sandbox project, which was announced in March of this year, to three.

This time around, Sweetbridge is using blockchain in a lending context. The company is trialing token-based asset lending through the next two years and covering 10,000 state residents. As has been reported, in the sandbox model, FinTech firms have two years to bring services to new markets and test them out, in a limited way and with an eye on wide adoption.

According to Cryptovest, Will Munsil, Sweetbridge’s head of legal projects, said, “We believe it’s possible for tokenized, asset-backed lending to lead to a lower-cost, more accessible kind of capital for many families in Arizona. We think this is a great time to live in Arizona, and we’re excited to bring our transformative economic models to Arizona citizens.”

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