Fintech partnerships let banks and other financial institutions combine regulated services, customer relationships and payment infrastructure with specialist technology. The arrangement can take several forms—from white-labelled products to open-banking APIs—and each assigns customer-facing roles, data access and operational responsibilities differently. A partnership creates an opportunity to test or deliver a service; it does not, by itself, prove that the service is innovative, beneficial or commercially successful.
How do fintech partnerships work?
A fintech partnership is a working arrangement in which a financial institution and a technology company contribute different capabilities to a financial product or service. A bank might provide a deposit account or payment service, while a fintech supplies software, a customer interface or specialist infrastructure. The exact division varies: the label “partnership” does not determine who serves the customer, controls data, performs compliance work or is accountable when something goes wrong.
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For community banks, partnerships can be one way to access innovation, as the Federal Reserve’s 2021 guidance on community bank access to innovation through partnerships describes. That letter is a useful starting point, but it is not a substitute for examining the terms and supervisory requirements of a particular arrangement.
What are the main types of bank-fintech partnership?
Several models overlap in practice, but they are not interchangeable. In particular, white labelling describes a branding and distribution arrangement; embedded finance or banking-as-a-service usually describes a third party’s role in delivering bank products or services; and open banking concerns permissioned access to financial data or payment functionality.
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| Model | What the arrangement does | What to clarify |
|---|---|---|
| Innovation-access partnership | A bank works with a fintech provider to obtain or develop technology or services. The Federal Reserve discusses this approach for community banks in its 2021 letter. | Which party builds, operates and supports the technology, and what happens if the provider changes or stops offering it? |
| White labelling | A financial institution works with another company, which may be nonfinancial, to offer a financial product or service under the partner’s brand. This is the EBA’s description of white labelling. | Who owns the customer relationship, handles questions and complaints, and makes clear which institution provides the financial service? |
| Third-party deposit-service arrangement, sometimes called BaaS or embedded finance | A bank and a third party arrange for deposit products or services to be delivered through the third party. U.S. banking agencies say these arrangements may be referred to as banking-as-a-service or embedded finance, depending on the structure. | Define the bank’s and third party’s specific responsibilities for customer communications, compliance, monitoring, records and incident response. |
| Open-banking or API collaboration | APIs let software systems exchange data or initiate functions. In relevant frameworks, customer permission and applicable rules govern access; an API connection alone does not establish what a partner may do with the data. | Specify permitted data, purpose, customer permissions, technical standards, security controls and what happens when access is withdrawn or unavailable. |
| Payments initiative or technology pilot | Industry participants may test a payment approach or explore infrastructure such as distributed ledger technology (DLT) before it becomes an operational service. | Separate a test or announced plan from a live service, and assess settlement, resilience, compliance and governance before deployment. |
The U.S. terminology and supervisory expectations are set out in a joint statement from the Federal Reserve, FDIC and OCC dated 25 July 2024. “BaaS” and “embedded finance” are labels, not stand-alone regulatory categories: the legal and operational details of the specific arrangement matter.
What evidence shows that these partnerships are being used?
White labelling in banking and payments
The European Banking Authority reported that 35% of banks responding to its 2025 Spring Risk Assessment Questionnaire used white labelling. That percentage applies to questionnaire respondents, not to all banks in Europe or worldwide. It indicates reported use of the model, not whether those arrangements improved customer outcomes or generated a return.
Fintech investment and deal activity
The UK Financial Conduct Authority’s 2026 Innovation Insights report said global fintech investment exceeded $130 billion across more than 4,500 deals in 2025. For the UK, it reported 445 deals and $15 billion in disclosed investment from 1 January through 31 December 2025. The FCA based its analysis on PitchBook data and its own analysis, excluded debt financing from its core analysis and used a targeted definition of fintech. These are market-activity figures, not counts of partnerships or proof that the deals caused innovation.
Open banking in France
An ACPR survey of six major French banking groups, reported in its report on open banking in France, updated 25 September 2026, found that API use remained concentrated in PSD2 payment services. Account-information services were more developed than payment initiation, while services outside PSD2 were still marginal. The report describes a complex, interconnected ecosystem in which specialist platforms supply infrastructure and technology. These findings concern the surveyed French groups and should not be generalized to every country or institution.
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Partnerships across the fintech sector
The Cambridge Centre for Alternative Finance’s 2025 Future of Global Fintech report is cited as reporting that 84% of fintech survey respondents had partnered with incumbent financial institutions; technology providers were a partnership type for 41%, and funding agreements for 36%. The available figures do not establish enough about the denominators to interpret those percentages confidently. Treat them as a survey indication, not as a directly comparable measure of partnership prevalence.
How can partnerships create room for innovation?
A partnership can combine capabilities that would otherwise take separate organizations time and resources to assemble. A bank may contribute regulated financial services, payment connections and an existing customer relationship; a fintech may contribute specialized software, data tools or a new interface. With suitable permissions and controls, APIs can connect systems without requiring each party to build the other’s entire platform.
That combination can make it possible to explore a service or technical approach, but the sources do not establish that partnerships reliably cause innovation, reduce costs, expand inclusion or improve customer outcomes. To evaluate a claimed benefit, look for evidence about the actual service, its users, performance and costs—not just an announcement, pilot or investment figure.
Payments and open-banking development
In a 2025 account of UK open-banking progress, the FCA described work with industry leaders on variable recurring payments (VRPs). It said a UK Payments Initiative formed by 31 firms was expected to be set up before the end of 2025, with transaction testing underway at the time. This is a dated account of development and expectations, not confirmation that the initiative is currently operating as a live scheme.
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Distributed ledger technology
The Bank of England’s DLT Innovation Challenge 2025 final report, published 12 May 2026, describes private-sector work exploring DLT in payments and settlement. The report identifies potential efficiency gains alongside challenges involving resilience, accountable governance, settlement finality, scalability, compliance and trust. A technology challenge can reveal possibilities; it does not, on its own, establish that a production system is safe, scalable or better than existing infrastructure.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What are the benefits and risks of bank-fintech partnerships?
The same division of work that makes a partnership useful can create dependencies. A fintech may control an interface or technical component that customers rely on, while a bank remains responsible for the regulated service it provides. If responsibilities are unclear, customers may not know whom to contact, and the bank may have difficulty monitoring activity or responding to an outage.
| Potential opportunity | Corresponding risk to assess |
|---|---|
| Use specialist technology without building every component in-house. | Provider dependency, service disruption, changes to terms, or difficulty transferring data and operations to another provider. |
| Reach customers through a familiar brand or a service they already use. | Confusion about which company supplies the financial service, handles complaints or can resolve an account problem. |
| Connect systems and enable data-informed services. | Unclear permissions, excessive data access, security weaknesses or a mismatch between the customer’s consent and actual data use. |
| Test payment or settlement approaches with industry participants. | Unresolved questions about finality, scalability, resilience, legal compliance and who is accountable for decisions. |
| Share development and operational work. | Costs or benefits may not be measured, and a partnership announcement may be mistaken for proof of commercial success. |
For U.S. bank-deposit arrangements, the Federal Reserve, FDIC and OCC state that banks should conduct third-party arrangements consistently with safe and sound practices and applicable laws, including consumer-protection and financial-crime requirements. The agencies put it this way: “The agencies support responsible innovation and support banks in pursuing third-party arrangements in a manner consistent with safe and sound practices and in compliance with applicable laws and regulations, including, but not limited to, those designed to protect consumers (such as fair lending laws and prohibitions against unfair, deceptive, or abusive acts or practices) and those addressing financial crimes (such as fraud and money laundering).” This is the joint agencies’ position, not a statement by an individual official.
How should a bank or fintech evaluate a partnership?
Before launch, both parties should be able to explain the arrangement in operational terms—not just name a model. A practical review can follow these steps:
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Outbyte PC Repair FREEClear out junk files and repair common Windows errorsFree Scan →Outbyte Driver Updater FREEFix the driver behind crashes, sound loss and screen glitchesFind Drivers →- Map the service and customer journey. Identify who supplies the regulated product, owns or controls each customer-facing interface, communicates key terms, handles questions and complaints, and manages account access or closure.
- Document data and technical access. List the data, APIs, payment rails and infrastructure each party uses; the purpose and permissions for each exchange; applicable standards and security controls; and how access is revoked or changed.
- Assign accountability in writing. Name the party responsible for compliance tasks, monitoring, recordkeeping, consumer communications, complaints, incident response and oversight of subcontractors. A contract should make escalation routes and decision rights usable in practice.
- Plan for disruption and exit. Define how the service will respond to an unavailable provider, API or payment connection, and how the institution can retrieve records, transfer operations or end the arrangement without losing necessary control of customer service.
- Check the applicable jurisdiction and legal structure. U.S. supervisory expectations, UK policy developments, EU frameworks and the French survey findings cited here describe different contexts. They are not interchangeable legal advice; determine which laws and regulators apply to the specific service.
- Set measurable commercial and customer tests. Agree what would count as a successful result—such as a defined service, reliability or customer outcome—and how it will be measured. Do not treat a pilot, deal count or partnership announcement as evidence of that result.
For any proposed partnership, a useful final check is whether each party can answer four questions plainly: who serves the customer, who controls each data flow, who acts when something fails, and what evidence would show the service is working as intended.
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