Through the global pandemic, we’ve seen dramatic shifts in how businesses (of all sizes) evaluate, select and use technology. For global payments fintech Airwallex, forging partnerships is key to bringing solutions to life as quickly as possible.
The Australia-founded fintech unicorn, which provides cross-border payment solutions to businesses, has previously teamed up with Visa in APAC, the Shopify team in Asia and Xero, the global small business platform.
Gajia Parsons is VP, head of partnerships and ecosystem at Airwallex. She leads the operations team in the Singapore office and is responsible for partnership and ecosystem development throughout the APAC region. Prior to Airwallex, Gajia directed strategic partnerships at Xero and Moula and also has a background in wealth management.
Here Parsons explains why she believes creating and maintaining suitable partnerships can be a powerful growth strategy for startups as well as incumbents.
In the digital economy, fintech partners are the new currency for businesses looking to scale. According to KPMG’s Pulse of Fintech – a bi-annual report on global fintech investment trends – global fintech investment was $105billion in 2020, the third highest year on record.
Partnerships can rapidly accelerate the growth journey by overcoming the challenges usually associated with scaling. Not only can a partnership raise your profile and provide market credibility, but it can also unlock new customer segments and act as a platform to enhance products and services.
However, creating a successful partnership is about more than a signed contract. A collaboration requires both parties to carefully align their target customers, company culture, strategic goals and overall vision.
Partnerships are shaping banking and finance
The banking and finance ecosystem is in a state of rapid evolution. Customer expectations are changing due to new technologies improving the user experience, while fintechs and neobanks are entering the market en masse.
Emerging fintechs are built to be agile, innovative and digital-first. This means they are able to pivot quickly in line with new market demands. This increase in competition has seen more established organisations look to modernise their customer experience and expand their product suite. To do this however, business leaders are often faced with the following challenge: Do we build, partner or buy external capabilities?
For incumbent banks and financial institutions, partnerships with emerging startups can help overcome the challenges of going it alone. A clear partnership can be an effective way to improve customer products and increase operational efficiency through technology integration. Our global partnership with Visa, for example, combined their network with our cross-border B2B payments capabilities. This allowed us to provide businesses with a multi-currency virtual debit card, further improving our product and capabilities.
Having secured and executed many successful partnerships throughout my career, there are a number of elements that make a successful fintech partner.
How to identify the right partnership
When creating a mutually beneficial partnership, start by thinking about your customers’ needs. It’s important to first establish how the target customer behaves, what they want, and how the partnership can meet these needs (both immediately and in the long-term). For example, our integration with Cloud-based accounting software Xero – launched in Australia in 2020 – was born from increased customer requests.
Next, it’s critical to consider how the partnership can deliver the most ROI for the respective organisations involved. Be open about what you’re trying to achieve, your working style and how you can provide value to your partner. The more clarity you can provide when establishing a partnership, the better the chance of success.
Finally, avoid taking on more than you can handle. The biggest mistake you can make is launching a partnership beyond your resources level and capability. Starting small will give the partnership time to establish momentum and success. Building traction not only provides space to test, learn and improve, it also creates a solid foundation to scale the partnership when the time is right.
How partnerships can support entry into new markets
For startups with global ambitions, expanding into new regions can introduce a myriad of unforeseen challenges – customer trust and market visibility being the obvious ones. This is where partners can help.
Established partners help create awareness and bridge the trust gap when a new player enters the market. Leveraging a respected partner’s brand in a new region means products can take hold more quickly. In addition, building trust and shared knowledge with your partner means you can avoid the ‘hard lessons’ that come from launching alone.
While the commercial benefits can be slow to appear, the intangible benefits, in the form of reputational or brand, are invaluable when introducing your brand to a new market or region.
Look for partners with a shared vision
Perhaps most importantly, partnerships only succeed when both parties align on culture and purpose. Just like any other relationship however, partnerships can suffer when decisions are made in silo and without considering the impact on your clash partner’s values or vision.
As fintech cements its place in the modern global economy, creating and maintaining suitable partnerships can be a powerful growth strategy for startups as well as incumbents. While there’s no one-size-fits-all approach to forming alliances, partnerships can give strategic startups a competitive edge and help overcome the roadblocks to rapid growth.