Core vendors seek to eliminate barriers in bank-fintech partnerships

The Milford Bank is a 149-year-old community institution in Connecticut trying to attract a younger audience. But there are limits to how extensively it can enhance its technological capabilities in-house or research, test and integrate products from potential fintech partners.

With the help of Fiserv, its core provider, the $550 million-asset bank incorporated into its offerings the services of, which helps users manage their student debt. Fiserv has been quietly engineering connections between its bank clients and fintechs that are meant to be cleaner and more efficient than ad hoc moves by banks.

Fiserv is not alone: FIS, Jack Henry and Finastra are also building technology bridges between traditional financial institutions and innovative fintech companies, in efforts that have sprung up anywhere from the last few years to the last few months.

Performing due diligence on potential partners can be arduous for smaller banks. When Fiserv and other core vendors do the heavy lifting behind the scenes, “it opens up a whole new set of potential partnerships with banks,” said Dan Latimore, chief research officer at the research firm Celent. “It won’t necessarily be plug and play, but the time to onboard, reach an agreement and start working together will be vastly compressed if they do this right.”

The fact that Fiserv recently created a senior executive post to oversee fintech strategy is a testament to how important these efforts are becoming, Latimore said. In October, Fiserv announced that it had hired Sunil Sachdev as head of fintech.

“We are being much more intentional in terms of seeking out partnerships with fintechs, anticipating the needs of our customers and introducing them proactively to our customer base,” Sachdev said.

By integrating fintech capabilities with its technology stack, Fiserv can quickly distribute these capabilities to its network of 3,700 financial institutions in the U.S. and let financial institutions go live with these products in a matter of days, the company says. Fiserv has been modernizing its application programming interfaces for several years, laying the foundation for this expanding business line. It will collect fees from the fintechs it partners with.

In 2021, Fiserv sponsored a fintech accelerator with Howard University and Humble Ventures. The accelerator will begin accepting new applications Jan. 2.

Other core providers are also orchestrating bank-fintech partnerships.

Finastra launched three years ago. This is a platform that contains an app store-like marketplace where financial institutions can browse 180 fintechs that solve a specific problem, such as cross-border payments or bill pay. Third-party apps are integrated with Finastra’s APIs before they appear in the store, meaning implementation with the banks can take hours rather than months, according to the company. Finastra shares revenue with the fintechs when a financial institution buys a product.

“If a financial institution uses core solutions from Finastra, we want the store to be their first port of call when they are looking for new capabilities,” said Philip Taliaferro, vice president of product management at Finastra. The next step, based on feedback from its clients, is to play a more active role in matching buyers and sellers of fintech services.

FIS launched its Fintech Referral Network several months ago with a specific goal: to match fintechs with sponsor banks to support activities that require a banking license. Fintechs can enter information on the FIS website and explain what kind of bank partnership they are looking for, and FIS will review the submission and try to make a match. There is no cost to this service, unless either party wants to consult with FIS further.

“We know more and more of our clients are interested in developing new revenue streams but don’t have relationships in the venture community with various fintechs,” said Fiaz Sindhu, general manager and business unit executive at FIS.

In the summer of 2020, Jack Henry debuted the Banno Digital Toolkit. This lets fintechs such as the payments provider Autobooks use the same API that the Banno Digital Platform is built on to more easily integrate their services with financial institutions’ systems, at no additional cost.

“One of my big initiatives was to make it easier for fintechs to work with us,” said Ben Metz, head of digital at Jack Henry. Jack Henry is actively striking deals to embed fintechs into the Banno platform using the toolkit.

The Milford Bank debuted its co-branded portal a few weeks ago. Users can build a student debt payoff plan, compare alternative repayment plans and forgiveness programs, and explore refinancing and consolidation options. The bank is getting the word out to customers and noncustomers alike with website banners and pop-ups, social media, messages on monthly statements and a roadside billboard. Access to the co-branded portal is being integrated into Milford’s app as a single-sign-on experience.

“We don’t ever want to cannibalize,” said Laurel Taylor, founder and CEO of “Our job is to help Milford further engage its existing customers and keep them on Milford’s banking experience.”

Such services will, the bank hopes, entice Generation Z and millennial audiences.

“Students loans is one thing we thought might resonate,” said Susan Shields, the bank’s president and CEO. “Everything gets kicked down the road when you’re carrying significant student loan debt — you can’t save for retirement, you can’t buy a house, you can’t start your own business.”

For Shields, the comprehensive nature of Fiserv’s program is a plus.

“It would be very difficult at $550 million [of assets] to go to each vendor and negotiate pricing and contracts, put in the necessary infrastructure, test it and develop it,” Shields said. “The speed with which we can bring [technology] to market and the efficiency we gain from using a partner like Fiserv help us bring a lot more to market than if we developed it internally.” 

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