This week on The Disruptors, co-host Amber Kanwar sat down with Randy Cass, CEO of Nest Wealth, to discuss why more FinTechs are partnering with traditional banks, and the impact the sector is having on consumers.
When asked about why FinTech companies like Nest Wealth “can’t go alone” and have to snag partnerships with major banks like National Bank, Cass said FinTechs do this to establish themselves as “substantial global players” and access a wider customer base.
“The reality of the Canadian marketplace is that distribution, moreso in Canada than any other geographic region, is so concentrated among, at most, ten large institutions,” said Cass. “To become a substantial player globally…you really need access to that distribution.”
Cass added that “distribution deals” or partnerships with large companies and banks is a two-way transaction that benefits both parties. Specifically, traditional banks can integrate digital solutions to enhance their customer experiences, while FinTechs gain credibility and access to a global market.
“We don’t have the aggregation of customers, or the relationships that they [banks or large companies] do and to get credible and to go global, to have a services agreement…that opens all sorts of doors and conversation for companies that are still just a couple years old like us.” said Cass.
During the interview, Cass also stressed that as customers’ demand increases for better services, prices, and quality, leading banks are looking for ways to meet that demand by adding digital solutions to their services.
“Front leading thoughtful banks like National are saying ‘How do we become one of the first ones to offer that type of service…to power our advisors to compete in the new environment?’”, said Cass. “It makes it a natural for startups like Nest Wealth to make these arrangements with National Bank where we get…an aggregation of customers to use platforms like us and they get the best-in-breed type of technology.”
Watch the full interview below:
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