There has been a constant evolution of bundling and unbundling of services in the financial services industry. Fintechs are great at this disruption, and their products, including payments, often disrupt multiple industries at once.
A lot of times, the larger institution, rather than subscribe or license the product offered by a fintech startup, will instead invest in the smaller company to minimize the risk exposure to a less mature business.
A managed service can offer value on multiple levels: reduction of costs (CapEx, OpEx), but also faster top-line growth, generating more customers and more revenue in a shorter amount of time.
A medium size enterprise might spend $500,000 on technology associated with onboarding customers and opening new accounts, whereas a solution might be 30 to 40 percent cheaper if they outsource it.
Most businesses want fraud losses below 1 percent. In order to do this, the business will need to use a range of technologies and services to vet the people they’re signing up. However, the tradeoff is when bad people are kept out, the good people are kept out as well. A managed service can address this and does not give away the user experience or the sign-up journey.