By Ben Snowman, VP Partnerships & Advisory at Mambu

Partnerships tend to be a great way for two parties to come together to reach a mutual goal and can be extremely effective between established businesses and new players. When it comes to operating a business, developing a strategic partnership is crucial in accessing new customers, reaching new global markets and accelerating growth.

Strategic partnerships can happen within all industries. However, when we look at what it means to be part of the partner ecosystem in the digital banking world, we are introduced to an array of collaborative efforts. This is usually between legacy providers, financial services and fintechs to future proof products and services for customers and end users. But how do we get started?

Creating strategic partnerships to drive better outcomes

A frequently asked question is ‘what makes a partnership strategic’? Organisations tend to remain independent when building an alliance with another establishment. However, they can combine their efforts in several areas, such as marketing, technology, finance, or a combination of these to acquire new capabilities within their existing business.

Investing together to drive better outcomes for companies and customers is a noteworthy way to ensure success within a strategic partnership. A way that businesses can double down on existing activity to focus on growth is by pooling resources and funds.

Innovation, at its core, is about solving problems, and having a relationship that emphasises this will more than likely be rewarded with longevity and success. 35% of managers cited alignment on objectives as a missing factor in failed joint venture partnerships, according to a study by McKinsey and Company. Therefore, it will be vital to align both short and long term goals to make a successful partnership both actionable and beneficial.

The benefits of a partner ecosystem

There are a multitude of benefits when utilising the partner ecosystem. A recent report by BPI Network found that more than half (57%) of companies use partnerships to acquire new customers, while over 2 in 5 (44%) form alliances to get new ideas, insights and innovation.

Additionally, access to new markets and customers is a common reason why businesses seek new partnerships. Increased market share and market access by tapping into another customer base can help companies expand their reach and establish themselves in new territory.

A strong partner ecosystem enables choice, and access to the best-of-breed solutions to meet the needs of customers while gaining a competitive edge over the competition. Collaborating with a partner that allows you to reduce time to market significantly can be lucrative for both organisations involved.

Differentiation in the market through collaborative efforts can also create a competitive advantage and increase brand loyalty and sales as a result. Customers are more willing to pay for products that come with a unique, functional experience. Sometimes, that can be developed through gaining access to materials, knowledge or a particular market to extend your product line and add to your value proposition.

The benefits are evident and the rewards can be huge. As more organisations think of the best ways to benefit through teamwork, some also want to know how they can future-proof their offering to ensure its longevity.

The future of the partnership approach

Traditional partnering is transactional with more focus on how much you can take rather than what you can give. This is the main reason why they rarely last long. However, with partnerships, by design we pool together to add value to our end clients which are mutually beneficial exchanges which can last for years or even decades.

Some organisations tend to rely on a network of partners to sustain their business and are dependent on a partner ecosystem. When a business offers a solution that becomes more valuable as more people use it, this will only strengthen the approach to building a flourishing community.

The result of a successful partnership offering will positively benefit customers and end users in the long term. The more the needs and priorities of a business evolve, the more a partnership approach can continue to adapt in response to any key areas that need to be considered in the foreseeable future.

What to bear in mind for strategic partnerships in 2023?

According to Accenture, In the next ten years, ecosystems could bring $100 trillion worth of value to businesses and society as a whole.

The possibilities for strategic partnerships in 2023 and beyond are endless when working with organisations that share mutual aspirations to grow and meet the demand of their consumers. Be sure that from the first instance you determine what type of partnership will best meet your strategic goals and put effective plans in place.

As well as identifying which partner will be good for a particular function, it’s important to understand the motivation behind the deal before the dotted lines are signed. This is an area that should be considered and discussed as part of day to day operations.

It should go without saying that trust is a key factor in any partnership, and it will be important to build that over time while being transparent and honest.

Where legacy providers have migrated to a ‘next gen’ cloud-native banking platform, their IT costs associated with core services have been reduced by approximately 50%. We are seeing this value as our partner driven approach ensures our richly diverse customer base has the technology it needs to succeed in a changing environment. Strategic partnerships will only continue to encourage innovation and a ‘give/give’ partnership strategy must be at the forefront of everything you do.