Developing times always bring about major changes in the functions and routes of organizational activities in every sector of occupation. Banking has not been spared from this wave of change, either. With their core principles being the driving force behind traditional banking systems, integrating these innovations becomes a task of great responsibility to handle both growth and integrity.
Strategic partnerships help banks achieve organizational growth goals and maintain the legacy of traditional banking.
Explained: What is a Strategic Partnership?
A strategic partnership is a fundamental economic relationship between two organizations established by a contractual arrangement. It encompasses terms broader than a simple business partnership, although not as much to be considered as a joint venture.
Medallion bank, originating from Utah, integrated a Strategic partnership into their business model in 2020 with Choice Payments Services for the loan application process. They define a Strategic Partnership as "the relationships we develop with non-bank financial services companies (including fintech, called "non-banks" going forward) to offer new financial products and services to customers."
The Unconventional Benefits of a Strategic Partnership
One sector that resonates well with the banking field is fintech.
Conventional banks are progressively attempting to modify fundamental principles employed by fintechs and explore the solutions of a SaaS partnership. The best partnerships involve integrating new solutions into their principal operation without altering their core value offerings.
The theme of fintech organizations' path to success may be evident in adopting technological advancements through a channel partnership or focusing on top SaaS providers. These advances make a fintech company potential strategic partners for banking firms.
The top benefits that a SaaS partnership offers include:
- Strengthened productivity
- Increased technology-wide integrity
- Reduced costs
- Marginalized populations with improved financing possibilities.
Banks have made significant investments in advanced functionality and technologies. These banks are now investing resources in building a SaaS partner program that supports and discovers potential consumer solutions to grow into new markets and fulfill their clients' rising demands.
Consistent, speedy development is only sometimes viable owing to the scale and scope of several contemporary banks. Contrarily, various non-banks excel through circumstances that change swiftly and are trained to adapt to changes given client input and economic cues. Without having to spend as significantly on newer technologies or certain facilities exclusively, the bank can expand, provide innovative solutions, and target underserved populations by partnering with a non-bank.
Operation-Based Solutions with an iCG Strategic Partnership
- Hosted Payments: iCG hosted payments pages provide a simple and safe solution to collect ACH and credit card payments online. Their hosted payments gateway opens up new income avenues for one's company and provides them the ease they need by keeping their payments PCI-compliant. Merchants can avoid liability by processing payments online using this secure channel.
- IVR Payments: iCG's Interactive Voice Response (IVR) payment solution allows clients to make phone payments using their touch-tone or mobile phone. IVR handles both ACH and credit card payments. It enables interaction through a keypad or voice recognition. Payments are submitted immediately and securely without the requirement for an internet connection—the platform decreases one's PCI scope by routing transactions through a given web portal rather than keeping and transferring confidential material in the system.
- ACH Processing: Payments are processed more quickly and without delay with Automated Clearing House (ACH) processing. The ACH Network identifies accounts by using a bank's routing and account numbers. This technology is particularly beneficial for setting up periodic bill payments for recurring and consistent products and services such as mortgage or rent, premiums, and membership charges since it settles money in batches.
- Credit Card Processing: Credit card payments are becoming the most preferred means of payment. iCG allows businesses to accept credit card payments regardless of their size or sector, giving them greater freedom.
- Email Invoicing: iCG's email invoicing solutions help businesses generate thousands of invoices and payment links with a single click. Clients appreciate the ease of paying online with an email invoice using ACH or a credit card.
- Virtual Terminal: The iCG virtual terminal helps the business track ACH and credit card transactions in a single internet-enabled terminal. This terminal enables users to manage their accounts and execute protected operations while ensuring PCI compliance. This approach converts any computer into a virtual terminal, allowing one to do business from anywhere.
The Different Types of Non-Bank Partnerships
The following partnership programs help banks gain via strategic alliances and offer opportunities for added resellers VARS to their customer base:
- Referral Partnerships: As part of a bank's value offering, its partner provides an off-the-shelf solution to the client. In simple words, here, the partner (you) gets to sell your product through affiliate programs or a referral program where the client gets an added value exclusive to the banks' existing customer.
- SaaS Business Integration Partnerships: Building a SaaS partner improves a bank's value proposal by modifying its current marketing strategy. The cloud availability of required services marks this as the best SaaS partner program.
- Payment Processing Partner: A payment partner facilitates the direct customer distribution of bank value propositions, goods, and services by offering unique payment processing with specific channel sales.
- Co-Creation Innovation: The partner and the bank contribute to creating a method that would not be achievable in segregation. Together they bring forth a specialized managed service or product designed by systems integrators.
- Societal Value Creation: Non-profit organizations and authorities leverage a strategic partnership to save donation fees and improve society while benefiting donors.
Key Factors to Consider Before Finalizing a Partnership
A fundamentally perfect strategy with the right partner benefits banks. The following list outlines the key factors a bank should incorporate into its design to successfully navigate the strategic partnership contract:
- Outline the Objectives
- Foster Mutual Benefit
- Research Principles and Values
- Evaluate Relevant Consumers
Real-Time Strategic Partnership Success Stories
Strategic collaboration is complex despite its simple description on paper, and successful frontrunners evidence its intricacies in the race to growth.
- Webster Bank partnered with NY Jets to distinguish their bank as the leading regional bank in the Greater New York metro area. They strengthened their business contacts through special game-day experiences and network prospects enabled by the Jets Partner Alliance.
- DBS teamed with energy, mobile, and broadband vendors to promote their offerings via DBS Utilities Marketplace.
- Bank of Montreal collaborated with Blend, a cloud-based platform provider, to provide digital mortgage/home equity solutions to its consumers in the United States by improving its lending process and shortening loan approval timeframes.
- Standard Bank Group and Pick n Pay teamed up to offer the bank's services in grocery stores.
- Apple Card was co-created by Apple and Goldman Sachs, with each partner offering a unique assortment of skills and expertise.
Strategic Bank Partnerships for the Future
Banks must improve their resources to compete in the sector, assess their skills, and delegate when necessary. It's wise to utilize tools offered by non-bank organizations instead of developing new ones. Partnering with other organizations will be crucial for success.
Banks should learn from successful partnership examples, adapt to partners at a larger scale, and modernize their partner skills. To collaborate effectively, banks should:
- Uphold partnership demands
- Outline a partner outreach strategy
- Adopt a partner-ready framework
- Develop a learning culture
- Digitize partner functionalities
Customer-centric learning can be applied to partner-centricity. To succeed, banks must be partner-ready. Get started with high-tech payment processing today with iCheckGateway.com. Become a partner by filling out the form below.
