> ## Documentation Index
> Fetch the complete documentation index at: https://wiki.jamesvarga.com/llms.txt
> Use this file to discover all available pages before exploring further.

# Making innovation 'free' in Fintech

> A staged deployment model where banks pay fintechs during trials and deduct those payments from the final contract — making innovation effectively free.

## 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](https://medium.com/@jamesvarga/making-innovation-free-in-fintech-fa3628494c73), April 2024.

## 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.

## 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.

## How does this connect to the wiki's knowledge areas?

This paper directly extends the [Fintech GTM](/knowledge/fintech-gtm/index) knowledge area and the [Procurement and evidence packs](/knowledge/procurement/index) 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](/projects/lessons-from-a-fintech) — the bank sales experience that informed this thinking.

## Related pages

* [Fintech GTM](/knowledge/fintech-gtm/index) — commercial system for fintech products
* [Procurement and evidence packs](/knowledge/procurement/index) — buyer risk and assurance process
* [Evidence packs for procurement](/knowledge/procurement/evidence-packs) — assembling proof for enterprise buyers
* [Scaling Beyond Marketing](/content/thoughts/scaling-beyond-marketing) — the transition to enterprise sales
* [Lessons from a Fintech](/projects/lessons-from-a-fintech) — operating lessons from fintech experience
* [Papers](/content/papers/index)
* [How to sell fintech products to banks](/knowledge/fintech-gtm/selling-to-banks) — bank sales process
* [Commercial sequencing for fintech GTM](/knowledge/fintech-gtm/commercial-sequencing) — staged deployment as commercial sequence
* [Evidence packs for procurement](/knowledge/procurement/evidence-packs) — proof requirements

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