S. Siņakovičs: Cooperation is always a good idea
18.10.2023.

Increasing digitalization and technological development have indeed changed the financial industry. Fintech companies play a significant role in this process, creating new and innovative products and services that are being adopted by an increasingly wide circle of customers. Cooperation between banks and fintech companies can create win-win situations for all the parties involved.

“However, for fintech companies to operate effectively, they need a stable and secure platform that our bank can provide. Thus, banks are crucial in developing the fintech sector by providing the necessary infrastructure and regulatory knowledge,” tells Staņislavs Siņakovičs, Head of Business Development Department at LPB Bank.

Cooperation between banks and fintech companies can create win-win situations – banks can benefit from the technological innovation and adaptability of fintech companies. In contrast, fintech companies have access to banks’ extensive customer bases and regulatory knowledge. “This way, cooperation could help both parties develop and compete in this ever-changing financial environment,” S. Siņakovičs emphasizes. He is sure that in the future, cooperation between banks and fintech companies will only increase as banks strive to maintain their position in the financial ecosystem and fintech companies continue to improve and expand their services.

Win-win for both partners
LPB Bank experience with fintech is broad and diverse. “We have worked with start-ups and large fintech companies, providing technology and helping build business models. Our experience has shown that cooperation with fintech companies is precious regarding technology and business models. Fintech companies can adapt and respond to market changes quickly, and they can provide valuable experience and knowledge to improve our services and processes,” says S. Siņakovičs.

LPB Bank clients began approaching the bank with new business ideas, including those from the fintech sphere. Another client segment was start-ups that initially wanted to open only a business account. Still, after obtaining a license, they also needed to open separate client fund accounts. Such clients needed a solution to manage their accounts conveniently, as fintech companies typically have many more payments than standard clients, and Internet banking is not convenient for this purpose. To solve this problem and provide modern technological access that is convenient and easily integrated, LPB Bank developed an application programming interface (API).

“It helps to update data about account changes and inform the client’s accounting system about incoming payments. API methods are regularly expanded. One example is webhooks, which help update data about account changes, notifying the client’s accounting system about incoming payments,” says S. Siņakovičs.

The initiative for such cooperation comes both from the bank and from clients. He says that often, it begins with a client’s desire or trends that the bank observes in the market. For instance, LPB Bank collaborated with CrowdedHero Latvia, the bank’s client and received the first operating permit for collective financing service provision in Latvia. “The client presented their business plan, the bank arranged meetings with several crowdfunding platforms, we compiled information with requests, and we are now preparing our vision of how it could work technically. If we get client confirmation, we will start the development,” says S. Siņakovičs.


Plans to collaborate more broadly

Does LPB Bank plan to collaborate more broadly with fintech? “Yes, LPB Bank sees the future with fintech and e-commerce. These areas will drive our business development and enhance our client service,” says S. Siņakovičs.

The bank’s strategy is closely tied to fintech and the provision of e-commerce services. It pays attention to market trends, client needs, and technological innovations. This approach allows the banks to be flexible and respond to the changing demands of the industry. “Furthermore, we are open to dialogue with representatives of the fintech sector. We aim to establish close partnerships with fintech companies to improve our services and ensure they meet our client’s needs. This is the foundation of our strategy – to promote mutually beneficial cooperation for all parties involved,” emphasizes S. Siņakovičs.

Cooperation is crucial
According to S. Siņakovičs, there are several reasons why cooperation with fintech is essential for banks. Firstly, fintech companies often rapidly introduce newer and more effective technologies. “By collaborating with such partners, banks could adopt some of these innovations and improve their operations while providing better customer service,” he says.

Secondly, fintech companies focus on new market niches where traditional banks are less active. That’s why cooperation with fintech companies can help banks reach these customers and offer them their services.

“Finally, the fintech market is rapidly growing and evolving. Therefore, banks must keep up with these trends and adapt to maintain competitiveness in this increasingly dynamic environment. Cooperation with fintech companies can be a crucial step in this direction,” assumes S. Siņakovičs.

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