BANKING
54 expansion of the industry , coupled with growing attention from regulators , make this the “ only viable approach in the long term ”.
Partnering with established financial institutions , who have developed airtight anti-money laundering ( AML ) policies and possess decades of security expertise , mitigates many of these issues . Moeller sees “ close collaboration between industry players ” as vital for fintech firms in “ maintaining the integrity of the online financial ecosystem ”. Here , fintechs are free to push the boundaries and iterate while remaining insulated within an organisation well versed in regulatory best practice .
The takeaway is that regulation doesn ’ t stymie fintech innovation . In fact , Leicht says it is opening more doors than ever for innovators : “ Regulation is also driving change . PSD2 ( Second Payments Directive ) and Open Banking are now encouraging competition amongst the traditional players and creating opportunities for innovation .”
Integrating more fully pays off , says Marieke Flament , CEO of Mettle , a digital-only business account platform backed by NatWest . She describes Mettle ’ s position not as a partner , but as an “ innovation test bed ” within the group .
“ It means we have the best of both worlds . It can be hard for a large traditional banking institution to roll out new cool features every week or month . But it is also very hard and expensive for the bold and agile fintechs to navigate the complex and ever changing regulatory landscape … Everyone should be doing what they are best at .”
DECEMBER 2020