Financial services to prosper from increased collaboration
RAPIDLY EVOLVING expectations and digitalisation are creating enormous challenges for the financial services industry. But they also represent tremendous opportunities for collaboration between central banks and fintech companies.
Increasingly, traditional banks and fintechs have come to appreciate that collaboration wins out over competition when it comes to driving innovation, growing revenue and delivering better banking services.
Collaboration is what allowed Island Pay and the Central Bank of the Bahamas to launch the world’s first central bank digital currency, the sand dollar. The first step in our collaboration was agreeing a shared strategic goal – to democratise access to currency across the Bahamas, especially for underserved communities that lacked financial services infrastructure.
The next step was to leverage one another’s strengths. The central bank brought the CBDC while Island Pay contributed its leading technology and track record of digital security and consumer safety to create usability and promote market-wide acceptance.
Together, we created a platform that allows individuals, merchants and governments to easily and securely pay for goods and services, as well as to transfer and receive funds electronically with a digital wallet. Recently, Island Pay and the central bank expanded on this by partnering with Mastercard to launch the world’s first CBDC credit card, letting consumers spend their sand dollars anywhere Mastercard is accepted around the world.
Collaboration is what allowed Island Pay and the Central Bank of the Bahamas to
launch the world’s first central bank digital currency, the sand dollar.
These are major steps in the global advancement of CBDC. We are currently in conversation with other central banks about replicating this initiative. This is just one example of how financial institutions can expand product capabilities, forging partnerships focused on new payment methods and basic banking products. These are the kinds of win-win collaborations that we must begin to see more regularly so that companies and consumers the world over can reap the full benefits of innovation in the long-term.
Similarly, partnerships between established banks and fintechs can yield immediate advantages to both. Banks gain the agility and innovation of a fintech, while offering customer loyalty, scale and established networks in return. At the same time, banks can build their visibility and customer base without competing with new platforms or having to invest in their own technological expertise.
In short, collaboration is the biggest source of opportunity in the financial services industry. When banks and fintechs come to the table with shared, consumer-centric goals, and each contributes what it does best, results will follow.