First, we'll cut to the chase. Here are my top four tips on maximizing fintech collaborations.

1. Build a company culture and choose partnerships where the involved parties (banks and fintechs) value each other, and are eager to work through any differences to impact beneficial change.

2. Ensure all customer and business needs are met via the collaborative efforts. This includes delivering capabilities with a proper blend of security and innovation. Equally important is to clearly define and delineate areas of responsibility and accountability.

3. Focus on digital channels to expand the depth and breadth of the bank's solution offerings.

4. Monitor the situation and be proactive. This includes adapting and improving as you move forward together to optimize progress. Additionally if the collaboration is not mutually beneficial, take steps to terminate the collaboration and move forward. There is no sense in spending good money after bad.

Now, to elaborate...

Research indicates that banking customers value the security and safety of transactions as the highest priority with their primary financial institution (PFI), but aspects related to innovation are also ranked highly. Banks clearly value – and demand – the absolute necessity for security in their work, but also recognize that the innovations fintech companies can offer is important. Ultimately, the ability of fintechs and incumbent banks to collaborate and bear fruit relies solely on ensuring all customer and business needs are met, including the proper blend of security and innovation.

We've seen tremendous efforts placed into the working relationships and direct partnerships between financial institutions and fintechs. Some have been more successful than others.

With the rapid rate of change in financial services, driven by the paramount need to meet customer experience expectations, circumstances require institutions to seek out innovation and differentiation via fintech solutions. While the business opportunities for collaboration are self-evident, accomplishing the actual integration, maximizing your return on investment (ROI) in these endeavours, and successfully going to market takes quantifiable effort between two typically very different development / operating models and cultures. The differences between banks and fintechs are manifested in areas such as development methods/practices, technology stack adoption and skillsets, leadership styles and personalities, and cultural risk appetites.

Harmony – generally speaking – requires more than one contributor to work in concert with each other, to synchronize efforts, to crescendo collectively in measured focus. Collaborations that succeed and maximize ROI tend to involve parties that value each other, and are eager to work through any differences to impact beneficial change.

Several years ago we witnessed the "rise of the fintechs" and the foreboding that it would bring about the end of traditional banking as we knew it. That prediction, as we know, did not come true, but it did cause most banks to take stock of how they approach the customer experience. As a result banks started to double-down on investing in technology to focus on improving the customer experience and to differentiate themselves in the market against fintechs and other banks.

Meanwhile, as fintechs were creating a buzz with their innovative offerings they also began to realize that customer acquisition, compliance, security, and brand recognition were not as easy to achieve as they envisioned in their business plans. It was at this point that we started seeing banks and fintechs partnering and pursuing business models based on collaboration and joint development that leverages each other's strengths.

What we are seeing with these partnerships is primarily banks leveraging fintechs to offer solutions that would be hard for banks to replicate themselves, and in turn fintechs get rapid access to volumes of customers that otherwise would take them years to acquire. In this sense, there is a harmonious union between the two parties. However, that harmony may be short-lived as some new fintechs are now entering the market and aggressively going after some of the most lucrative banking domains.

As a result, banks are positioning themselves to become less reliant on fintech collaborations. Some banks are getting good at attracting technologists themselves, and actively reinventing their culture to be innovation driven, with a focus on digital channels to expand the depth and breadth of their bank's solution offerings. As such their partnerships with fintechs – viewed as strategic only a few years ago – are now considered important but not necessarily essential for the bank's survival and growth.

Conditions are changing, and thus the collaborations between banks and fintechs are likely to change too. Factors impacting the market outlook include regulations such as the European Union's Revised Payment Service Directive (PSD2) which requires banks to allow fintechs access to customer data on behalf of the customer, and the Office of the Comptroller of the Currency (OCC) in the U.S. Department of the Treasury exploring awarding bank charters to fintechs. We'll need to monitor the situation carefully to ensure the banks invest wisely in a working model that will yield a sound ROI and ensure the banks move forward into the new digital age of banking (aka "the 4th Industrial Revolution).