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Companies financial services: What customers need

April 3rd, 2021
M & A

Companies financial services: What customers need

April 3rd, 2021
M & A

Everybody was focused on two technology and app developer companies called Goldman Sachs and Apple when they confirmed that a new way of payment is going to be available soon as Apple Pay. This lets you manage and track your spending with all security features and virtual buttons. After all the bank industry saw a big opportunity to deal and invest in this matter because, in only a few months, Goldman Sachs’s value was augmented by more than 736 million USD. For the Goldman Sachs enterprise, Apple was just the first step. Goldman Sachs and the bank developed a system for approving customers for their app. Right now, based on different reports, Goldman Sachs is utilizing its advanced technology to develop credit cards with other enormous companies such as General Motors. By these affairs, we comprehend that partnership with other enterprises is the main key to increase the revenue for financial services, and all around the world many companies are doing and coping with the same thing that Goldman Sachs has done

Generally speaking, it’s assumed these new methods of partnership and payment services such as checking and saving accounts, property insurance, and investments for start-up companies, had a value of at least 70 billion USD in The United States in 2019 and we expect that it will grow up and become double in 2025. The profitable intellections of these partnerships are multi-dimensional. Partnerships cause natural growth through product advancements and developments in different areas. They can help to change the priority and expectations of the users, whether it is digital access or any commercial desire. Even it is estimated that the Covid-19 pandemic has a huge effect on the augmentation of these partnerships because, in PostCovid19, many companies are going to face money and budget reductions.

How Partnership Can Aid Low-Cost And Low-Risk Measurements in companies

 Attracting customers is the main base of growth but it can be expensive and hard. Some comparison websites in America, Europe, and India have given to their users a one-step purchase destination for more products and they collect a reward for each successful visit. Have more customers is difficult indeed because it is hard to make a contact with these clients via physical branches.

Becoming a partner of those companies that already have their royal clients is one of the best and effective ways to gain more customers.  Also, the partner makes a profit by filing by its product portfolio and meet the further needs of its customers in these contracts and agreements. 

The desire to participate in the tech-savvy. Consumer jobs are highly motivated across the economy. Partnerships can cause some sales that may not happen so easily and also, they can improve the customer experience in other ways. For example, not only do some giant telecommunication companies give their users loans to buy advanced and modern cellphones but also, they provide insurance policies for losing or breaking your phones. Credit contribution is one of the important ways of decreasing the cost of accepting card payments.

Banks are just 50 percent of the equation of participation and there are many beneficial factors for both parties. Sometimes a financial enterprise will be the main point of obtaining customers and it let them take profit by participating in other ways.

In 2019 and 2020 the coronavirus pandemic is compressing the revenue and expenditures and it makes the financial enterprises reconsider their roles in different sectors of the value chain. They seek to analyze the costs and benefits of possessing several data centers and substructures instead of consolidating their spending by host substructure through cloud principles.

Two Ways Of Participation of companies

There are two ways for financial statement businesses to be led toward participation:

  1. Some of them market their productions under their name and via the participation of the distribution channels that they are connected to and sometimes the two partners decide to mix their brand names altogether and when two giant companies mingle their brands (for example two companies centered in technology or even a bank and an airline), they can benefit from each other’s customers easily and of course by cooperation.
  2. Banks can furnish some supports that let the partners manifold their revenues by selling financial services in the name of their product brands. Banks are the first financial-services enterprises that are taking this step.

Which one we are supposed to choose? Well, it depends on the capability of the financial enterprise. For example, many of them have a nice relationship with their customers, or the others have capabilities and still developing it in other aspects in chain value such as product insurance. Or other examples like Web bank confesses that its regulatory and compliance power is due to a partnership with giant technology companies such as PayPal.

Although having large partnerships can have many advantages such as expanding resources and capacities and variety of customers, their large size might be against them. For instance, in America, many giant banks and companies are stuck in rules and regulations and hobbled in bureaucracy but on the side, small banks, especially those whose assets are less than 10 billion USD are freer when it comes to exchanging fees.

How Can We Find Partners

One of the ways of finding a partner is looking toward the large and famous enterprises that are well-known in technology and innovation among all the brands and also those companies that have nice reputations to cooperate with them. Those companies with large customers are good choices as well. They have gained the market in their hands and are pioneers in different aspects like airlines, health insurance, or internet service providers. Healthcare centers are looking for partnerships nowadays because they have high investment potential and are top-ready to have participated in different sections.

Decide On The Role Of Participation

Mostly the plans of partnership for a financial company are done by the opposite side. For example, Goldman Sachs had spent more than 1 billion USD to make the user banking technology modern and wants to establish its brand. This firm also wants to have a partnership with other giant technology and service companies such as Apple and Amazon and indeed it wants to extend its worldwide platform.

How To Make A Collaborative Work Proceed in companies

The most challenging part of participating in debates is money but not all the time. For instance, when a customer is fully attracted to the enterprise and little by little the other partner fades out or even in some cases, the other partner separates from the company after some years, closing the transaction may be sufficient for the bank to easily pay the referral fee or reward.

The partnerships last for good but they must negotiate with each other about the sharing revenues and costs percentage. It’s a must for partners to clarify the profit and loss and their strategic priorities in advance.    

By Amir Masoud Navidi

Adapted from: Strategy&

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