How well are fintechs served by banks?
Agency banking services are critical to the ongoing success of both banks and fintechs across the UK and EU. But what do fintechs really think of the services they receive from their bank partners?
This research report uncovers the trends and attitudes of executives responsible for their agency banking provider relationship – showing how views have changed from 2020 to 2024.
Key insights
Rising complacency toward banks
Fintechs are not disillusioned with their agency banking partners. The problem is they’re indifferent. 61% of fintechs consider the impact of working with an agency banking partner as neutral to the business. In 2020, a slight majority (51%) felt that their agency banking provider had helped their business. This has now slipped to just 29%.
Fintechs demanding more strategic partnerships
Agency banking providers are viewed as a supplier or utility rather than strategic partner, particularly by large fintechs. Satisfaction on these measures has decreased substantially since 2020, while other measures have only seen slight changes. Either agency partners are substantially worse in these areas than four years ago or, more likely, expectations have changed. As fintechs have matured, they want more from their partners.
Increases in regulatory intervention
A fifth of fintechs have experienced some kind of regulatory intervention, and was defined as the most common problem for fintech and agency bank relationships. Following several high-profile failings, greater regulatory scrutiny has been placed on the industry and may explain the rising cases of regulatory intervention. It would be expected that heightened scrutiny would lead to improvements in the quality of banking services and operational resilience, yet the data indicates that agency banking providers are, at best, maintaining the status quo. As regulators continue to focus on the safeguarding of customer funds and operational resilience, agency banks will have to evolve.
Technology and service quality top selection criteria
Innovative technology, quality of service, and operational resilience are the main reasons fintechs choose their banking partners. While quality of service is generally good, there is room for improvement with less than a third of fintechs rating any area of service as ‘excellent’. Overall, these factors have remained consistent since 2020, though resilience and quality of service are now more important. High profile bank failings over the past 18 months have likely shifted the importance of a bank’s resilience in the eyes of its fintech partners.
Average service of quality score 2024 vs 2020
Compared with 2020, satisfaction is lower across all categories. Those who have been with their banking provider the longest are more dissatisfied with their banking provider.
"This report is essential reading for fintechs seeking to benchmark their agency banking provider against the wider market. It also provides actionable intelligence for banks looking to improve their agency banking services for fintechs."
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