Collaboration Is The New Competition In FinTech

By Patrick Moorhead - January 11, 2021

Nearly every industry had to pivot, in multiple ways, to adapt to the challenges brought on by 2020.  FinTech has been one of the most impacted, with people working, shopping, and banking from home due to social distancing. Although partially sprung from Covid, the trends in online banking, lending, and digital and contactless payments will likely continue. Furthermore, they'll continue in a surprisingly collaborative way. The race to win in the FinTech arena looks more like a relay race than a winner takes all endeavor—it's a team sport, with everyone building solutions and products on top of existing financial services infrastructure. Let’s take a closer look at this trend. 

The global pandemic has indeed accelerated the shift to digital commerce and payments, in some cases replacing the retail and merchant experience altogether. This is likely due, in part, to these FinTech businesses having to continue to work and function in various stages of lockdown while answering consumers' evolving financial services needs. These behaviors changed so fast, both at the consumer and commercial level, that the only real way to address them quickly was collaboration. The only path forward, as I see it, is for this to continue. 

At a Silicon Valley startup, where I come from, everyone wants to "disrupt" an industry.  However, FinTechs are proving that collaboration can be a more successful path. Many of the more popular startup payment methods you might have used to pay for your morning coffee were built upon banking institutions' existing infrastructure. This collaborative approach lends the established banks relevance and innovation while giving FinTech startups decades of trust, customer loyalty, and ultimately, security for its users. 

In both the startup and traditional financial spaces, the real winners are the ones who embrace embedded finance and the rising importance of the API. In my previous life as CMO of, we adopted a "win together" mentality throughout the company, especially when it came to processing complex payments in a highly regulated space. Rather than build new, complicated technology to process lottery tickets on the mobile device, the team assembled a tech stack that included PCI-compliant APIs for KYC as well as balance and location checks. Additionally, we partnered with processing behemoth First Data to accept debit, credit, and ACH payments. Through collaboration, the company was able to process transactions without functioning as both the platform and the bank. Collaboration is the new competition, and the industry seems to be embracing it.

Visa's recent multi-billion acquisition of Plaid and Mastercard’s M&A spree (which includes notable acquisitions Finicity and Net), is indicative of the banks' current flurry to reinvent themselves. With the number of debit and credit card transactions shrinking as other digital payment methods gain traction, these moves are also a way for the traditional financial institutions to future-proof themselves. 

Ultimately, this collaborative partnership between banks, card networks, and new payment methods that build on top of existing financial services infrastructure will fuel the financial space, provide useful, time-saving tools for consumers and industry and increase connectivity across accounts.

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Patrick founded the firm based on his real-world world technology experiences with the understanding of what he wasn’t getting from analysts and consultants. Ten years later, Patrick is ranked #1 among technology industry analysts in terms of “power” (ARInsights)  in “press citations” (Apollo Research). Moorhead is a contributor at Forbes and frequently appears on CNBC. He is a broad-based analyst covering a wide variety of topics including the cloud, enterprise SaaS, collaboration, client computing, and semiconductors. He has 30 years of experience including 15 years of executive experience at high tech companies (NCR, AT&T, Compaq, now HP, and AMD) leading strategy, product management, product marketing, and corporate marketing, including three industry board appointments.