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What Apple and OpenAI’s Partnership Reveals About Strategic Innovation


Staying ahead of the innovation curve means meeting end-user expectations where they will be, not where they are currently (even though achieving that can frequently be challenging).

With the news Monday (June 10) that OpenAI and Apple are partnering to incorporate ChatGPT’s language model into Apple’s iOS, iPadOS and macOS platforms later this year, embracing third-party partnerships to quickly stand up marketplace-defining innovations that their end-users ultimately expect is increasingly top of mind for banks, FinTechs and B2B players.

The classic dilemma of whether to build an in-house solution, buy a ready-made product or form a partnership to integrate new technologies has been a cornerstone of business development for decades, but the importance of partnering with third-party vendors has increasingly come to the forefront. The fast-paced evolution of technology and the rising complexity of consumer expectations adds layers of intricacy to this decision.

The Apple and OpenAI partnership is designed to give Apple’s digital assistant Siri and its writing tools a shot in the arm with advanced artificial intelligence capabilities.

While Apple could have used its own AI capabilities, the company realized that its customers may want to use other AI solutions, including those that Apple itself deems industry-leading, like OpenAI’s.

This fundamental fork in the road is the very same dilemma that many traditional financial institutions and payments players are facing as they look to balance their legacy cores with the seamless, technology-driven experiences their most valuable end-users have come to expect.

Read also: How APIs Bridge Modern and Legacy B2B Payment Architectures

The Need for Strategic Partnerships When Embracing Innovation

In today’s competitive landscape, the speed at which a company can bring a new product or service to market is crucial. Historically cautious and regulated, banks have traditionally been slow to adopt new technologies. However, the rise of FinTech companies and changing consumer expectations for digital services have forced banks to rethink their strategies.

“It’s becoming an imperative to improve the operational efficiency at these legacy banks and be more responsive to client needs and industry trends,” Galileo Head of Product Strategy Michael Haney told PYMNTS this week, saying that this new generation of platforms is based on MACH principles: microservices, APIs, cloud and headless.

As technology continues to evolve, the complexity and specialization required will make it increasingly difficult for companies to rely solely on in-house development. Partnerships offer a way to stay competitive, innovate and meet the expectations of consumers and businesses alike.

“I think there is tremendous opportunity in this environment to strike new partnership deals and create ecosystem collaborations around product,” Igor Bazay, vice president of finance at data intelligence platform Enigma, told PYMNTS in April.

The PYMNTS Intelligence report “The FinTech-Bank Relationship Shifts Toward Collaboration” found that 65% of banks and credit unions have entered into at least one FinTech partnership in the past three years, with 76% of banks viewing FinTech partnerships as necessary to meeting customer expectations.

“The customer, regardless of whether it is a consumer or a business, they’re driving a lot of this change with their expectations,” Rossana Thomas, vice president and general manager of Enterprise Payments Platform at Fiserv, told PYMNTS in May.

See also: Buy, Build or Partner? The Dilemma in B2B Payment Modernization

Compliance and Governance Rule the Partnership Roadmap

By partnering with third-party vendors, businesses can focus on their core competencies while using the specialized expertise of their partners. The strategic focus allows companies to differentiate themselves in the market and deliver superior value to their customers.

Still, the effective management of third-party risks, as well as the mitigation of single points of failure, is perennially essential for partnership success — no matter the industry a business is operating within.

As the fallout from FinTech Synapse’s bankruptcy shows, the impact of a partner’s collapse can result in substantial ecosystem damage.

“With complex ecosystems, you have a higher number of partners than you may have historically had” in the past, Larson McNeil, co-head of marketplaces and digital ecosystems at J.P. Morgan Payments, told PYMNTS in March.

This creates new considerations for the corporate treasury function, including management of those partners and counterparty risk.

As technology continues to advance and consumer expectations evolve, the role of strategic partnerships will undoubtedly become even more pivotal in driving business success; it will just need to be tempered by effective compliance controls.

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