Having partnered with many banks and financial services organizations, I’ve learned a lot going through the business development process with each of them. Based on this experience, for other fintechs looking to partner with banks, I’d like to share the
following eight requirements to guide your own business development processes:
1. First of all, be bank-grade. (See my
previous post on this topic.) It is an exciting time to be in the finance industry. We sit at the intersection of the creation of money and the application of technology at a time when each dimension is undergoing a renaissance in its own right, while the
synergy created at the crossroads is off the charts. On the other hand, banks and other FIs have a lot of options when it comes to Fintechs in most categories, so it is simply table stakes to have a bullet-proof product.
2. Sell to the team, not to a person. In my entire career, I have never come across a single individual who had the ability and authority to commit their organization to a deal of size, and could execute entirely on their own. It is far more likely that
a matrix of stakeholders will be involved in the decision, and it is very possible that any one of them (you won’t know which one) may have veto power. I recommend you embrace this by taking a consultative approach as you engage with prospective partners.
In other words, think like a consultant such as
BCG ...approach every potential customer as a case with a problem that needs to be solved, and we involve as many people as we can to make sure we are addressing every stakeholder’s unique problems and therefore maximizing every opportunity.
3. Focus on the benefits to their customers, not to their company. What I’ve heard most often from bank partners is, “Our strategy is to focus more on the customer, increasing the value prop of our brand.” So help them do that. The customer base is the
foundation of every company. Does your product clearly save those customers time? Does it save them money? Does it make them money? Does it make them happier? Beyond those four dimensions, your prospects have to squint harder and harder to see the value of
your product. Help them understand how you can benefit those customers.
4. Establish three key relationships: The Executive, the Product Owner, and the Project manager. The first step in selling to banks is to have the connections to get to the right person at the organization you want to sell to. If you are lucky enough to
have great investors, who are incredibly networked and actively work on your behalf to create connections in your industry, you are way ahead of the game, and you already know that the non-cash value of such investors is immeasurable.
But even if you don’t have those connections, however you do get through the front door, it is now up to you to become besties with the three key people who will largely influence your success.
First, you need an Executive Sponsor who can allocate budget and put your solution on the Plan of Record. This is the heart of the deal, providing the lifeblood for the project. Without it, you will fail.
Second, you need to put the Product Owner on speed dial and establish a back-channel texting relationship. This person is the head of the deal, weighing options, directing resources and making decisions to optimize the outcome. Without it, you will fail.
Finally, you need to have an open and direct relationship with the Project Manager. This person is the neck of the deal, and can thus turn the head in the right direction based on what is happening on a day-to-day basis. Without this, you will fail.
Remember that a committed deal is not a signed deal, and that even a signed deal can get to the 11th hour and not be implemented. Make key friends, become part of the team, and help everyone be successful together. Bend over backward for these people to
make them successful.
5. Be respectful of their timelines. In my previous post on being bank-grade, I made the point that you cannot “run fast and break things” and expect to be successful in the comparatively slow-moving financial services industry. The financial services industry
moves slowly for a reason: A careful and intentional pace ensures stability, and a methodical approach ensures trustworthiness.
Stability and trust are good things to have when it comes to the banking system. As a startup, you may think in weeks and months, while the banks you are trying to sell to are necessarily thinking in quarters and years. It is not their problem that you are
impatient. It is not their problem that you could easily implement tomorrow. It is not their problem that you are running out of money. Nothing about your needs should or does factor into their decision to move forward and at what pace.
Your job is to look at the world from their point of view, put yourself on their team, and help them navigate through their process within the possible time constraints. I love this industry for many reasons but chief among them is a desire to do things
right rather than do things fast, for the ultimate benefit of the end customer.
6. Recognize that everyone has zero technology resource availability. If they had ample tech resources, they wouldn’t be as open to partnering with your fintech. So respect this constraint, and provide options. For example, in our business development process
we make it clear that our platform has a deployment option that requires no technology integration or lift on the part of our partner whatsoever. However, it is also configurable and customizable, which means tech resources can be applied to achieve greater
levels of integration and fit with other functionality that may be important on a per-partner basis.
With this principle in mind, make it easy for your customers to adopt your product. Provide a crawl/walk/run pathway to deeper functionality. Take as much of the lift off their hands as you possibly can, and focus on the value to the customer. Then, let
success drive your expansion. Make some fire, and they will bring you more wood.
7. Give them a clearly defined engagement process. This is the most important thing. Realize that it is very unnatural for any company to buy things. They are in the business of selling things to their customers, not buying things from you. Assume that they
don’t do it often, and that they don’t have a defined process to do it. As such, it is up to you to bring them a clear and rational process to help them buy your product.
The purpose of the process is to give your prospects all the inputs they need to build a business case internally so that they can make a decision to buy your product. Remember that said business case is going to require input and approval from the aforementioned
matrix of stakeholders. It is also going to be the thing that enables your Executive Sponsor to run it up the flagpole to get approval. It also will be the nexus of the definition of the scope document and statement of work. It is also going to define your
economics and implementation timelines.
During our business development process, we have a clear set of meetings that explores every aspect of the required business case, from which comes a deliverable that is a piece of the puzzle. At the end of the process, we have involved tech, product, marketing,
infosec, finance, business line owners, etc., and gathered all the requirements to build a document that our prospects can use to literally get everyone on the same page.
Every step of the process is customer-centric, required, and inspectable by anyone involved in the relationship. The net result is getting prospects through a decision process and the implementation workflow as quickly as possible by coming to the table
with a plan of engagement.
8. Be honest, always. If you have to lie to sell your product, you need to go back to the drawing board. Institutional honesty is the secret sauce to success. Don’t lie about pricing – don’t add hidden fees that are going to spring up later. If you have
them, share redacted revenue numbers from other partners to show what’s possible, but never overstate the opportunity.
As well, be honest about timing – if a potential client has a goal to implement in a timeframe that is impossibly unrealistic, it is your duty to them as a trustworthy partner that it cannot happen. Finally, if a prospect wants a product that is too far
outside of your ability to configure and customize the platform, then it simply isn’t a fit. In cases like these,we will (and we have) walk away from a deal rather than try to shoehorn them into a shape that doesn’t fit them. (If this happens, consider referring
your prospects to adjacent, friendly companies in your space when appropriate.)
Ultimately, we should all be in the business of building long and lasting and successful partnerships with our customers, and the first step of that long journey starts with simple honesty. Every fintech should keep the truth-first approach in every dealing
with prospective partners, as well as with existing clients. It’s a small industry, and word WILL get around if you risk being dishonest.