There is a rising indifference to agency banks among fintechs, according to ClearBank, the enabler of real-time clearing and embedded banking for financial institutions, which has released research into the attitudes of fintechs towards agency banks, with worrying implications for long-term relationships.
The ClearBank report, ‘How well are fintechs served by banks? The state of agency banking across the UK and Europe’, asked fintechs across Europe about their relationship with agency banking partners. ClearBank polled a mix of large, medium and small fintechs from Lithuania, Germany, the Netherlands, Sweden and the UK, representing a mix of service providers and technology providers.
The results show a rising indifference to agency banks among fintechs. While the duration of partnerships remains stable- around four years for larger fintechs and around two for smaller – Clearbank notes a decline in satisfaction with agency banking partners.
In ClearBank’s last report on the topic in 2020, it found that half of fintechs felt that agency banks had helped their business, while a third felt the impact had been neutral. In 2024, those numbers have shifted, with just 29 per cent feeling that the relationship had helped their business, and 61 per cent seeing a neutral impact.
For smaller fintechs, this shift was even more pronounced, with 72 per cent reporting a neutral impact on their business. Meanwhile, negative sentiment was essentially static.
Quality of services quickly dropping
Around 15 per cent of fintechs are now looking to change providers, with this proportion rising to 23 per cent for mid-size fintechs. Those who want to switch are planning to do so in the next year, and most who do not plan to switch cite the pain of switching as the reason for staying with their current provider – rather than satisfaction with their current provider.
Despite it becoming a bigger consideration for fintechs when selecting a partner, there has been a noticeable decline in the quality of service that fintechs feel they are receiving since 2020. Satisfaction with the speed, security, reliability and ease of use provided by agency banks have all fallen in the last four years, particularly among larger fintechs.
John Salter, chief customer officer at ClearBank, commented: “This report captures a growing chasm forming between fintechs and their agency banks. While agency banking services have been vital in enabling fintech innovations, banks now risk being seen as a mere ‘utility’, in the same way we only really care if our power or water isn’t available and are indifferent when it is.
“Fintechs don’t want another supplier, they want partners who challenge their thinking – who not only innovate, but help their partners innovate. Those who fail to deliver a high quality of service and technology will find themselves standing on increasingly shaky ground and risk losing out to those who do.”
Fintechs also appear to be becoming increasingly unhappy with their banking partner’s ability to enable innovation in their business.
