In the Press
October 3, 2023

Fintech-Bank Partnerships: Allocating Risks and Rewards (Practical Law The Journal)

Professionals
Partnerships between fintechs and banks have revolutionized the financial services landscape. The convergence of technology and banking has delivered new financial products and services faster and better. Partnerships to offer lending products are the most prevalent type of fintech-bank partnership and can be structured many ways. For the relationship between a fintech and a bank to succeed, the parties must strike the right balance in allocating the partnership program’s risks and rewards. The parties must also consider regulatory expectations, including the federal banking agencies’ June 6, 2023 interagency guidance addressing banking organizations’ risk management practices for planning, due diligence, selection, contract negotiation, monitoring, and termination of third-party relationships, including relationships with fintechs. Alexander Callen, Financial Services partner, explains more in Practical Law The Journal