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Banks must learn to evolve with FinTech companies

Every year, Fintech businesses become stronger, and with their attractive offers of BNPL and consumer financing for merchants, various financing platforms are dominating the financial industry. With a smoother and more convenient service available, Fintech companies have offered clients a variety of sales finance solutions. As a result, they have won over a sizable majority of customers of traditional financial institutions. What should the banks do going forward—fight for their position or team up with Fintech companies?

Although some major investment banks may view Fintech companies as rivals in the financial sector, others believe that their approach to consumer financing and innovative products, such as POS financing and Buy Now Pay Later, are precisely the reason why they should work together and utilize their innovative startup ideas to adapt to the modern methods of consumer financing.

As an illustration, we can look at ChargeAfter’s partnership with Fortiva Retail Credit, a POS financing solution provided by the Bank of Missouri. Because of how well the partnership worked out for both parties, they have only recently expanded it. As a result, ChargeAfter is now able to give customers more options, while Fortiva is gaining new clients.

“As the first credit program to integrate with ChargeAfter, we are excited to extend and expand our relationship,” said Dave Caruso, the chief commercial officer of Atlanticus Holding Corp.

What Can Banks Get from Fintech

Fintech is proven to be an intriguing industry for investors due to its ability to leverage new technologies to challenge old company practices. Even though the majority of Fintech businesses are still small and have limited resources, they still provide innovative BNPL startup ideas and consumer financing for small businesses. These advancements can provide banks with new opportunities to broaden their customer base and adopt smart concepts from Fintech companies.

In addition to the innovative ideas that Fintech can provide, banks that work with financing platforms can gain a ton of new consumers. Customers are being drawn to use various POS financing alternatives by ChargeAfter’s availability to numerous retailers, merchant financing for customers, and other BNPL solutions. Additionally, when consumer financing for small businesses is present, the network provides consumer financing for small businesses or small BNPL white label companies. Working with a financial network like ChargeAfter can only be advantageous for any bank, especially since lenders in the network have access to major international corporations as well as international eCommerce and retail merchants. Collaboration can significantly expand the clientele with only one easy move.

Banks can gain from quick or cutting-edge innovation when working with Fintech firms without having to make significant investments in it. Through their access to smart ideas like cryptocurrency and Intelligence investing, Fintech companies open up possibilities for banks aiming to expand their customer base and meet their changing needs.

Work Together for the Faster Improvement

Different financing platforms, Fintech firms, BNPL banks, and financial institutions have been competing to dominate the sector for years. Fortiva Retail Credit’s partnership with ChargeAfter demonstrated to us that, rather than being competitors, Fintech and traditional banks can work together to provide services that can transform the consumer experience for customers of various businesses, and BNPL white label companies that adopted POS financing demonstrated to us how quickly they can grow their customer base. As more banks work together with financing platforms, customers will have more alternatives to borrowing money from lenders. Both parties will benefit greatly from this possibility as customers will have more options for financing their needs and sales finance options will increase. On the other hand, banks will be able to win over a segment of customers who have already switched to Fintech’s more creative financing options and were seen as lost customers by banks.

Finally, it is a given that any traditional financial institution working with innovative financing platforms will benefit financially. Particularly when platforms like ChargeAfter may offer banks and consumers a waterfall method to find the optimal match for them both. Customers are constantly searching for the best banks or financing options to help them obtain the finances they require, but it is crucial for any bank to lend money to a client they can trust in. This is easily handled with ChargeAfter’s waterfall system, which will have a positive outcome for all parties.

About ChargeAfter

ChargeAfter is a leading multi-lender platform for Buy Now pay later (BNPL) Consumer Financing. It connects businesses with the most reliable lenders, enabling them to offer customers the greatest financing solutions. With the best system of Waterfall Financing, ChargeAfter guarantees BNPL lending to every shopper, by matching the most relevant lender to every client. Using the unique consumer financing technology, ChargeAfter provides all parties, merchants, lenders, and consumers, with the best shopping experience. Phoenix, MUFG, VISA, Bradesco, BBVA, Synchrony, PICO Partners, CITI, Propel Venture Partners, Plug and Play, and other companies worldwide are among the investors of ChargeAfter.