Banks and FinTechs: Building Partnerships Through a Strategic Lens
Banks and FinTechs: Building Partnerships Through a Strategic Lens
Having serviced a large portion of the Fintech and Banking industry in South Africa with a particular focus on partner and sponsorship models, BDO has gained hands-on experience and insights into many issues relating to partnership models within the industry. Here are three key problems we have identified and a general approach to how these can be resolved:
Problem 1.) Integrating Customer Risk into KYB (Know Your Business).
In today’s Banking and Fintech ecosystem, a static, one-size-fits-all KYB process presents significant risks. Banks can no longer afford to treat every merchant or partner as a routine case – risk-driven onboarding must become the norm. Leading platforms are already shifting toward approaches where each partner’s risk rating dictates the depth of due diligence required, effectively balancing compliance efficiency with customer experience. Partnerships should be tiered by risk score from the outset: high-risk partners warrant enhanced scrutiny and additional controls, while low-risk partners benefit from streamlined verification that expedites onboarding. At the same time, fintechs – often operationally lean – have historically placed less emphasis on building mature risk and compliance functions or strengthening controls such as KYC, AML, and integrated FICA frameworks. For banks, this creates an additional challenge: ensuring that their fintech partners uplift their compliance posture to meet the standards of sustainable, risk-sensitive collaboration.
Tech partners such as RelyComply enable this balance through an AI-powered KYC/AML platform that embeds risk intelligence into onboarding. Its capabilities - ranging from business verification and entity screening to transaction monitoring, adverse media checks, and regulatory reporting - support risk-tiered onboarding. This ensures high-risk entities trigger deeper due diligence, while low-risk businesses benefit from faster, automated onboarding, improving both compliance rigor and customer experience.
Problem 2.) The inability to track pricing effectively.
Pricing across banking products involved in these partnerships often lacks sufficient granularity, both in understanding and in oversight. Historically, these partnerships have also not been priced in line with their underlying risk, as the frameworks used to evaluate risk were designed primarily for customer relationships rather than for bank–fintech partnership arrangements. A comprehensive understanding of the true cost of products is crucial for teams negotiating pricing and deals with potential partners. For example, this may include the cost of processing an EFT, the cost of opening a bank account, or the cost of maintaining a dormant account. Additionally, indirect costs – such as the time and resources consumed by compliance and risk teams in supporting these arrangements – are rarely factored into negotiations and calculations.
Problem 3.) The lack of a targeted platform, API, and Fintech partnership strategy.
Historically, banks formed partnerships reactively in response to client requests, which Fintechs leveraged to access the National Payments System. Over time, this meant that banks onboarded partnerships under loosely defined strategies and commercial cases in response to client needs, without assessing profitability or cost coverage. Banks need to revisit these partnerships through a strategic lens, especially given Fintechs superior aggregation and customer acquisition models.
Where BDO can help:
As customer-facing fintech platforms increasingly shape how customers access financial services, banks must sharpen their partnership strategies, operating models, and regulatory alignment to remain competitive. At the same time, fintechs need to strengthen their compliance, governance, and licensing posture to position themselves as credible partners of choice for banks. BDO bridges both sides of the equation – helping banks embed partnership discipline and regulatory assurance, while enabling fintechs to become bank-ready and scale sustainably.
- Strategic Partnerships: We work with banks to develop clear Fintech and API partnership strategies that align directly with profitability and cost models.
- Legacy Optimization: We help reassess and restructure legacy partnerships through both a strategic and commercial lens, ensuring alignment with evolving market realities.
- Operating Models for Growth: Our teams design tiered operating models that embed KYB, accountability, and pricing discipline into the foundation of long-term business growth.
- Regulatory Compliance: We support both banks and fintechs in navigating complex regulatory pathways – from securing licences (PSP, TPPP, SO or banking) and preparing GN5 outsourcing submissions, to developing AML/CFT and governance frameworks that align with FIC Act, Prudential Authority, FSCA, PASA, and Joint Standards. Our services include licence application support, regulatory gap assessments, and the design of compliance frameworks that strengthen governance, risk management, and bank-fintech alignment.
- Fintech Enablement: We also support Fintechs in elevating their onboarding, compliance, and risk management processes, making them stronger, more attractive partners for banks.
Banks and fintechs must now recalibrate their strategies and work together to stay competitive in a market where customer access is increasingly controlled by digital platforms. With its multidisciplinary expertise, BDO is uniquely positioned to connect these two worlds – enabling banks to strengthen their partnership models and fintechs to build credibility, while helping both sides innovate responsibly, unlock value, and scale with confidence.