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What this piece is

This paper proposes a practical model for fixing the broken bank-fintech partnership dynamic. It draws an analogy from advance purchasing in the Canadian mining industry to propose a staged, paid trial approach where banks pay fintechs during proof-of-concept phases and deduct those payments from the final commercial agreement — making the trial effectively free for the bank while providing fintechs with revenue and credibility. Originally published on Medium, April 2024.

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What is the central argument?

The bank-fintech collaboration model is broken. Banks’ risk-averse procurement processes create a catch-22 for unproven fintechs: banks want evidence of scale before engaging, but fintechs cannot get evidence without bank partnerships. The solution is a structured trial model with defined stages, KPIs, milestones, and payment schedules. Banks pay modest fees during the trial period. If the trial converts to a full contract, those fees are deducted from the commercial price. The bank gets innovation at effectively zero net cost. The fintech gets revenue, credibility, and product-market-fit validation.

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What are the key concepts?

The catch-22 of fintech procurement. Banks want proven solutions. Fintechs need bank partnerships to prove their solutions. Neither side moves first. The advance purchasing analogy. In Canadian mining, companies pay upfront for resources not yet fully extracted, sharing risk with producers. The same principle can apply to bank-fintech relationships. The staged deployment model. A defined process moving from paid proof-of-concept through pilot to full deployment, with commercial terms agreed at the start and trial payments credited against the final contract. What both sides gain. Banks get early access to innovation with minimal risk. Fintechs get validation revenue, a reference client, and feedback that shapes the product for market fit.

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How does this connect to the wiki’s knowledge areas?

This paper directly extends the Fintech GTM knowledge area and the Procurement and evidence packs framework. The advance purchasing model is a practical response to the procurement barriers documented in those pages. It also connects to Lessons from a Fintech — the bank sales experience that informed this thinking.