Top 10 Questions to Ask a Potential SaaS Fintech Partner
In an industry that’s growing rapidly and has moving goal posts, it can be tough to look at all your options for innovation and evaluate them thoroughly without getting overwhelmed by all of the options available.
When selecting a SaaS Fintech partner, how do you as a financial institution leader weed out the potential liabilities and zero in on the best?
Here are 10 top-level questions you should ask all potential partners to help you make the right decision.
1. Can they do a demo?
A very basic but essential requirement – if they can’t demonstrate what they say they can do, they’re not in a place for a successful partnership. This does not mean that what is currently in development should be completely discounted, but there needs to be some display of abilities before you can measure their credibility.
2. What are their investors?
Many FI’s will have guidance or rules around partnering with Fintech companies that have equity ownership from their competition. If that’s a problem, sort it out quickly to save everyone the time. Fortunately this is not a concern at Grow, as we’ve had to take the path somewhat less traveled by turning away great potential strategic investors for this reason as we wanted to make sure this was not an issue with future partners.
Additionally, make sure they can keep in business. Let’s face it, there are a lot of Fintechs out there that are just a few years old and not all of us will make it. You don’t want to see all your hard work go to waste if your Fintech partner doesn’t survive past the start-up phase.
3. Have they partnered with a financial institution before?
A previous partnership with a similar FI is a good indication they can meet the demands of your project and that they’re up to the job generally.
4. Can they meet your security requirements?
Their capabilities might sound fantastic but if they can’t meet the strict security requirements of the banking and financial services industry, that’s going to be a deal breaker. Try to determine this as soon as possible before you invest too much time in something that simply has no legs to it.
5. Do they have the capacity?
Assess whether their team can handle the scope of the project – if the team is too lean, you may need think twice about handing them a larger project. Be wary of over-promisers and under-deliverers!
6. Can they help with the change management process?
Having the capacity to help you initiate the changes needed for new processes can be a huge benefit and makes the transition post-launch much easier.
7. Are your business objectives aligned?
Depending on scope this will range in significance, but if the Fintech’s long term goals are contradictory to what you are hoping to accomplish as a business, you may want to think twice about supporting them.
8. Can the Fintech help fulfill your digital strategy, either through their product or even culturally?
The right Fintech can influence your digital strategy and make recommendations based on (if they have it) previous experience, or what they know is in development that could impact your business. When implementing any change to processes internally, there can be resistance – can the Fintech help with education or engagement with your staff to encourage them to embrace innovation?
9. Do you buy into their value prop or are you trying to turn them into your personal development shop?
Do you value the Fintech’s vision and strategy they have in place for their offering? If you envision them as merely an extension of your business, you may struggle with giving them the autonomy they need in order to be agile, streamlined and efficient. They may operate in a way that’s foreign to you – be prepared to stand back and let them get on with it if you truly believe in what they have to offer.
10. Do they have client references or feedback from other Fintechs?
Endorsement from businesses you trust, particularly those that think positively about their tech and how the business is run, is an encouraging sign that they can walk the walk. Ask around.
Moving forward with confidence
When you’re asking these questions, be tough and make sure you get satisfying answers. Know their management team and governance to understand how they operate and what their long-term objectives are.
Remember that you’re not just selecting a vendor – you’re entering a partnership here. The most successful partnerships are between businesses that have aligned vision, goals and KPIs; are willing to partake in risk sharing; and are focused on iteration and improvement.
If your Fintech partner meets all of the above, you can move forward with confidence.
Kevin Sandhu is CEO & Founder at Grow | firstname.lastname@example.org