Advice for Fintechs - the dos and don'ts of pitching to banks

I spent many years leading digital for New Zealand’s biggest bank. During that time, I met with lots of start-ups, and did deals with a small subset of those.

​Now that I’ve escaped corporate life, I’ve been reflecting on all those interactions and here’s my advice to fintechs who want to partner with banks.

It’s not you, it’s me. 

Unquestionably big financial institutions are slow, risk averse, bureaucratic and arrogant. Banks have ways of doing things that can be incomprehensible to start-ups, but that’s just the way it is. (Banks are enormously complex businesses and at the centre of that is the imperative that they keep their customers’ data and money safe).
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The way banks act is irritating and inexplicable to start-ups but you won’t change them – so here’s some Dos and Don’ts that you can try which may at least improve your engagement with them and hopefully your chance of doing a deal.

Do: Be careful who you meet with.​

Like any big organisation, banks have oodles of staff who will jump at the chance of a meeting with a cool new start-up, irrespective of whether that person has the authority, subject matter expertise or budget to progress a deal. When you connect with someone at a bank, do your research to understand who they are and what their authority might be.
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Over the years I’ve had lots of fintechs say to me “we’ve had to go through 20 different people at your bank to progress this idea”. You can guarantee that at least 18 of them had day jobs that were irrelevant to doing a deal, but they were interested in a coffee and a chat with an enthusiastic start-up.
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When you meet with a new contact at a bank, ask them to help you get clear about what they do and who it is who makes new capability recommendations or approvals. Ask for an introduction to the right people.  

Don’t: Vapourware will get you nowhere

Remember that partnering with a fintech requires the bank to share their reputation, market share and resources in return for your unproven IP and software. Surprisingly it’s very common that fintechs will approach banks with an idea but no actual working code.

In every case I would say “come back when you have something working to show me”.
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The number one reason that banks partner with fintechs is because they either can’t or don’t want to have to build the capability in-house themselves - they don't want to build your MVP with you.

You need to at least show me a clickable prototype if you want to capture my interest. Basic working software shows you’re committed to the idea. Even better if you’ve tested it on some users too!

Do: Be flexible with use-cases for your product

Quite often fintechs turn up with one specific use case only to be told that’s not an actual problem in the bank (we’ve just invested in a new platform to do that; that’s not a priority for us right now).

Having a number of use cases for your software increases the chance that the bank will see a solution for a problem they are trying to solve.
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Try and be mindful of the types of issues that banks might be grappling with – right now it’s about regulation, cost reduction/process automation and bad debt management.
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Be prepared with a number of scenarios for how a bank could use your product. For example – if you have a great new tool for a bank’s credit card customers, could it also be used internally by bank staff?

Don’t: Ask me to dance if you’re not able to

There is nothing more infuriating than a fintech who has pitched a new capability only to turn around and say they can’t proceed with you because they have an exclusivity arrangement with a competitor or their board has decided to pursue some other strategic direction. (And it happens surprisingly frequently).
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In my experience if you miss that magic window when a bank is ready to make a deal then there’s no going back. If you come back to them later, they will have moved on, either with another vendor or another initiative altogether.

Do: Expect progress to be glacial

Banks have a million things to prioritise and road maps can be locked in six to twelve months ahead. They often won’t have people to work on your new opportunity until they’ve finished with what they have underway now. Plan for a lot of downtime when working with a bank (and don’t put all your financial eggs in that one basket).

Don’t be that person

Don’t tell a bank that you are going to disrupt them and take all their customers, (why are you even meeting with them if that’s the case?)

Don’t tell them a technology they’ve just invested in was a stupid idea (even if you think it is).

Don’t fintech-splain how banking works, they know their business better than you.

Don’t tell them everything that is wrong with their current digital tools/processes, in all likelihood they are painfully aware themselves and they’re doing the best they can within their current environment.

Don’t get caught up with how technically amazing this new technology is, talk about real-life use-cases and why it’ll better than the status quo.
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Don’t be aggressive, rude, late, waffly or in general wasting of their time. They’re doing you a favour meeting with you and you’re not just there to sell an idea, you’re there to earn trust too.
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(All of this has happened to me BTW – including someone telling me that mobile apps were dead when we were signing up 5,000 new mobile banking customers a week!).

Do:

Do listen carefully to what the bank tells you and try to understand their needs. Do show them beautiful working software, talk about why your solution is better than what they have now and entice them with how you can solve their problems.

Good luck!