HOW BANKS AND FINTECHS ARE CO-CREATING A NEW ERA OF PAYMENT INNOVATION
Sandeep Chakravadhanula
Capability & Practice Leader, Financial Crimes
FUTURE OUTSMART THE
The global banking industry long viewed the rise of FinTechs with skepticism, as agile disruptors working away at the edges of traditional financial services, challenging the status quo. However, over the past decade, the dynamics between banks and FinTechs have matured.
Rather than duplicating efforts, the industry has recognized that innovation thrives best in partnerships, with bank-FinTech collaboration creating new value and becoming mission-critical in the process. FinTechs combine cutting-edge technologies and agile development cycles with a laser-sharp focus on user experience. Banks, on the other hand, bring decades of infrastructure, regulatory compliance frameworks and customer trust.
A recent study highlights this collaborative trend, with rising adoption of FinTech solutions by banks across digital banking (43 percent), regulatory technology (46 percent) and open banking Application Programming Interfaces (API) (45 percent).1
Nowhere is this shift more pronounced than in the payments space. Payment facilitation has become the leading area of collaboration, with 39 percent of US banks already collaborating with FinTechs, and another 39 percent planning to do so. Together, they are re-defining how payments are processed and settled, laying the foundation for a more agile, transparent and future-ready financial ecosystem.2
1Why
Banks and Fintechs Are Stronger Together | Fintech Insights
We Thrive: The Untapped Power of Bank-Fintech Partnerships | Bain & Company
Fueling Ecosystem Modernization Through Bank-FinTech Integration
The rise of FinTech and PayTech firms has accelerated digital innovation within financial services, raising customer expectations. For instance, consumers are increasingly demanding faster and more convenient payment options, with research showing that 77 percent expect businesses to offer instant payments.3
Businesses across the financial ecosystem acknowledge this shift, as well. Payment speed is a key priority for midsize businesses, driving interest and adoption of instant payment options, while 61 percent of merchants
3Why Real-Time Payments Are the Next Big Thing in Fintech | Finextra
42025 Payment Trends | Citizens Financial Group
expect Real-time Payments (RTPs) to provide them with a competitive edge.4,5
While payments have traditionally been encumbered by slow processing times, manual workflows and obscure fee structures, particularly for cross-border transactions, disruptors have introduced new models that dramatically improve on these limitations. In doing so, digital innovation has not only raised customer expectations; it has re-shaped the competitive landscape.
561% of Businesses Expect a Competitive Advantage with Real-Time Payments | PYMNTS
To meet these new demands, banks are integrating their legacy systems with FinTech platforms, enabling smoother end-to-end processing and faster settlements across borders and use cases. They are actively leveraging FinTechs to modernize and expand their payment ecosystems, with several core strategies driving this integration:
APIs & Open Banking
Banks are integrating their payment platforms with FinTechs through APIs, allowing systems to speak to each other securely and in real-time. As open banking gains traction, banks can expose select customer data and service offerings to third-party providers, enabling a rapid scaling of digital innovation without overhauling core infrastructure or disrupting onboarding procedures. The result? Agile ecosystems that enable faster settlements, lower transaction costs and greater transparency for users by meeting regulatory expectations and mitigating fraud.
Payment Integration
FinTech partnerships are also enabling direct integration with instant payment systems such as Europe’s SEPA Instant and the US’ FedNow, unlocking frictionless, automated payments and seamless experiences. The value of real-time payment transactions is projected to grow by 289 percent from 2023 to 2030, underlining the transformative potential of these innovations in re-shaping financial interactions.6
White Label & Acquisitions
Alongside integrating or co-creation of FinTech solutions, many banks are exploring white-label models – or acquisitions – to accelerate digital transformation and tap into innovative services. In doing so, banks not only absorb technological capabilities but also talent and innovation culture, enabling them to stay ahead of the curve.
Examples of such collaboration are proliferating worldwide. Take Banking Circle. The Luxembourg-based payments bank, focused on providing financial infrastructure to businesses and financial institutions, has recently partnered with Visa Direct. This enables the latter to strengthen its cross-border payment capabilities by leveraging Banking Circle’s extensive network of local clearing rails for faster, more efficient and cost-effective transactions.7
6Real-time Payments: Driving Disruptive Innovation | J.P. Morgan
Elsewhere, HSBC has joined forces with cross-border payments platform Dandelion, enabling the bank to establish direct connections with local payment rails, streamlining what was once a complex chain of transactions. It means clients can now send funds to more than 100 destinations across 60 currencies, with a technical integration powered by real-time foreign exchange tracking and fraud monitoring systems.8
7Banking Circle S.A. Teams Up with Visa Direct to Enhance Global Payment Capabilities | Banking Circle
8HSBC Expands Cross-Border Payments Reach with Enhanced Global Money Transfers Service | HSBC
From Service Providers to Trusted Advisors
Payment innovation might represent a starting point, but successful bank-FinTech collaboration is also being leveraged across a wide array of product offerings –think digital wallets for seamless spending, Buy Now, Pay Later (BNPL) platforms for flexible financing or embedded finance capabilities for non-financial partners.
Crucially, however, this is no one-way street. While FinTechs help banks accelerate digital innovation and maintain competitiveness, they also benefit from banks' operational maturity, regulatory infrastructure and scalability to grow.
These partnerships allow each player to focus on its strengths. Banks can continue offering trusted products and services, while FinTechs build APIs, open banking networks, enterprise resource planning systems and Treasury
Partnering
Management Systems (TMS) that improve the overall financial ecosystem with customer-centric innovations.
This symbiotic model is already emerging. NatWest’s FinTech Growth Programme is one example, designed to empower FinTechs with the resources, networks and expertise of a high-street bank to help them scale sustainably while co-creating next-gen digital solutions.
In this context, banks must go beyond product delivery, evolving into trusted advisors that support clients with secure, streamlined payment processes. With a survey of compliance professionals in bank-FinTech partnerships showing that 90 percent of sponsor banks struggle with compliance, this kind of advisory mindset shift will prove integral to unlocking the true value of collaboration.9
to Unlock the Future of Financial Services
As the financial services ecosystem continues to evolve, collaboration between traditional banks and FinTechs marks a fundamental structural shift. FinTechs offer the agility, innovation and customer-centric focus required in a fast-changing market. Banks offer the trust, regulatory rigor and institutional strength that FinTechs need to scale.
Bank–FinTech partnerships are becoming foundational pillars of financial innovation, with the average bank now engaging with 9.4 FinTech partners. Yet two-thirds of these partnerships fall short of expectations, pointing to persistent challenges in aligning goals, capabilities and processes.10
Looking to the end of 2025 and beyond, the success of these partnerships will rest on transparency, shared vision and customer-first value creation. Third-party organizations can bridge capability gaps by offering expertise, tools and industry insights, from next-generation digital technologies and intelligent analytics to flexible operating models.
By leveraging their complementary strengths and engaging the right transformation partners, banks and FinTechs can not only deliver better outcomes today but also co-create the financial ecosystem of tomorrow.
Discover how WNS is helping banks and FinTechs co-create agile, future-ready payment ecosystems. Explore our capabilities | Connect with our experts
9How
Untapped Power of Bank-Fintech Partnerships | Bain & Company
About WNS
WNS (Holdings) Limited (NYSE: WNS) is a digital-led business transformation and services company. WNS combines deep domain expertise with talent, technology, and AI to co-create innovative solutions for over 700 clients across various industries. WNS delivers an entire spectrum of solutions including industry-specific offerings, customer experience services, finance and accounting, human resources, procurement, and research and analytics to re-imagine the digital future of businesses. As of June 30, 2025, WNS had 66,085 professionals across 65 delivery centers worldwide including facilities in Canada, China, Costa Rica, India, Malaysia, the Philippines, Poland, Romania, South Africa, Sri Lanka, Turkey, the United Kingdom, and the United States.
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