Collaborative Competition - ‘coopetition’ for short - is a term that has been floating around the Fintech and financial services scene for a few years now.
As far back as 2009 Chris Skinner of The Finanser - who spoke last week at the Paris Fintech Forum event - was discussing the benefits this kind of practice would bring - the idea being to work for a common cause while keeping enough of a distinction between products to differentiate yourself from the competition.
Now however the concept seems to be in full swing - with half a dozen ‘coopetitions’ on show at the Paris FinTech event alone - six more than they had this time last year. In a panel session, alongside Chris Skinner, titled “Competition, Collaboration, Coopetition” Beatriz Gimenez, Head of New Digital Business Strategy at BBVA, acknowledged that “BBVA’s clients want a better customer experience and we can deliver that best through our collaboration with Fintech companies.”
Given that statement, its no surprise then that at BBVA coopetition is a business model we have been working on for some time now. A good example being our recent roll out of a new mobile onboarding service that enables customers to open an account with just a photo ID and a selfie. BBVA collaborated with FinTech companies to develop the process before presenting it jointly for approval with the regulators. While we will always compete for customers and the excellence of our service delivery, we are actively working with the Fintech community to get the technology approved - which in turn allows BBVA to better serve its customers.
Beatriz Giménez during her speech.
Back to Paris, though, another of those promoting this type of business model at the event was Sean Park, Chairman of VC fund Anthemis, who highlighted their vision of the future of financial services. Speaking to more than 1,500 delegates ranging from C-suite banking execs to influential high-growth tech firm founders, he said that he believed that finance didn’t need to start from scratch - the future only needed to be an expansion of the ecosystem and the coopetition model will create unique value proposition for customers.
The benefits for the industry - and ultimately the customers - are significant. Startups don’t have to spend hundreds of euros trying to acquire customers that someone else already has and vice versa, banks can benefit from the ability of startups to innovate and build technology rapidly and efficiently. Which in turn means the cost for customers is kept low, while also fuelling further innovations.
As previously mentioned, the role of the regulators is key too - because as well as the formal approval process, regulatory bodies play an increasingly important part by creating innovation hubs and regulatory sandboxes with joined up thinking from across the globe.
To sum it up, as Chris Skinner put it, a healthy dose of coopetition will create a health ecosystem that will take the pain out of banking.