How challenger banks can work alongside established finance
Competition is out. Collaboration is the new way for financial institutions old and new to thrive
PODCAST: The new era of finance: collaboration is key
Challenger fintechs and established banks can both thrive if they work together
Challenger fintechs are here to upend the status quo, with fast technological innovation and service winning customer hearts and minds. But rather than see them as threats, experienced banks can leverage innovation – while providing a safe space for more nimble challengers to experiment with thinking and scale up with financial backing. It’s a mutually beneficial idea, one that throws out blunt-headed competition in favour of a more sophisticated approach. Listen to Intesa Sanpaolo’s Head of Innovation talk about what collaboration has done for the industry, and what it will do next.
The past 10 years have seen huge technological advancements uproot the old ways of banking and an industry catapulted into new ways of working.
Technology has made possible the delivery of new financial products, new ways of serving customers and new structures for finance to explore and capitalise on.
This has led to the creation of a raft of smaller challenger banks. “These banks are offering a fully digital and ecommerce offering,” says Natascia Noveri of Intesa Sanpaolo. “Businesses with strong customer experience and lower charges are experiencing a high growth rate and customer acquisition.”
"Challengers are setting new standards for customers and the business model. We cannot avoid taking that into consideration."
Natascia Noveri, Head of Innovation, Intesa Sanpaolo
As Intesa Sanpaolo’s head of innovation, Noveri is responsible for navigating the bank through the next decade of change. She says the key to growth is to harness the positives caused by the disruption of challengers.
“They are setting new standards for customers and the business model,” she says. “As the incumbent bank we cannot avoid taking that into consideration.”
Intesa Sanpaolo seeks to form partnerships with new entrants into the sector. Experienced banks can leverage innovation, providing a safe space for more nimble challengers to experiment with thinking while scaling up with financial backing. It’s a mutually beneficial idea – one that throws out blunt-headed competition in favour of a more sophisticated approach.
In February 2022, as part of its 2022-25 Business Plan, Intesa Sanpaolo partnered with Thought Machine to develop Isybank, a cloud-native digital bank. It has also forged links with Google on the journey to cloud banking. Building on open banking successes, the bank also hopes to extend to open financing and to use data to inform ESG-driven investment.
“We do not see a slowdown, more a continuation of this momentum,” says Natascia Noveri. “This is an opportunity to boost innovation. Open banking has allowed us to gather opportunity externally – but now we can talk about open finance, which is the evolution of open banking, and it will allow the same opportunities for other counterparts, not only the financial system.”
More than 12 million customers are already benefiting daily from using Intesa Sanpaolo’s digital channels, which include its award-winning banking app. To hear more about how intelligent fintech partnerships are reshaping the financial landscape, listen to the podcast.