[FinTech Shark Week] FinTech in Open Water – Seize the Opportunity While Maintaining Control with Guest Angela Murphy
Wrestling Payments Podcast: Season 3 - Episode 15
In this episode of Wrestling Payments, host Elyssa Morgan talks with Dr. Angela Murphy from Pidgin about the shift from competition to collaboration between financial institutions and fintechs. They explore why partnership is a critical strategy for shaping the future of financial services and meeting rapidly evolving customer expectations.
Angela addresses the common fear among institutions of losing control. She argues that fintechs like PayPal and Venmo have already changed the landscape. Instead of being a threat, the right technology partners can help institutions provide better digital experiences and augment the customer relationships they have already built.
This conversation provides a playbook for moving forward. Angela shares how institutions can analyze their payment strategies, find opportunities in the B2B space, and leverage technology to reduce risk. For any institution looking to innovate, this episode offers a clear path to seizing opportunity while maintaining control.
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Guest-at-a-Glance
💡 Name: Angela Murphy
💡 What she does: Vice President of Marketing and Solutions
💡 Company: Pidgin
💡 Noteworthy: Known as the "Payments Elsa," with deep expertise in payments innovation and AI.
💡 Where to find her: LinkedIn
Key Insights
Collaboration is the New Competition
The financial landscape has fundamentally changed. Customer expectations, shaped by seamless digital experiences in every other part of their lives, now demand the same convenience and speed from their financial institutions. The old model where a bank or credit union could provide every service in-house is no longer viable. Today, staying competitive means recognizing that you cannot do it all alone. Collaboration with fintechs is not about giving up; it is a critical strategy for survival and growth. By partnering with technology providers, institutions can rapidly deploy the innovative solutions customers demand, from faster payments to better digital interfaces. This allows them to not just stay afloat, but to lead in a fast-moving industry.
Redefine Control, Don't Lose It
Many financial institutions hesitate to partner with fintechs, fearing they will lose control over the customer relationship. This fear, while understandable, is often based on a reality that has already passed. The rise of services like PayPal, Venmo, and Cash App proves that customers will seek convenience elsewhere if their primary institution doesn't provide it. These fintechs won on utility, not on deep personal relationships. The real opportunity is to embrace partnership strategically. By working with the right fintechs, institutions can augment their offerings, providing modern, seamless experiences under their own trusted brand. This approach doesn't cede the customer relationship; it strengthens it by adding the digital tools necessary to remain the central, trusted financial advisor in your customers' lives.
The Untapped Potential of B2B Payments
While much of the payment innovation has focused on consumers, a massive opportunity exists in the B2B space. Commercial and treasury payments are often still reliant on outdated, inefficient processes, creating significant friction for businesses. For financial institutions, this is a clear opening to create new value and generate substantial revenue. Developing a payment strategy centered on solving B2B challenges can set an institution apart. By partnering with fintechs that specialize in this area, you can offer businesses the streamlined, digital, and secure payment solutions they need to operate more efficiently. This not only solves a critical pain point but also solidifies your role as an indispensable partner for your most valuable commercial clients.
A Practical Playbook for Innovation
Innovation doesn't have to be an overwhelming or abstract goal. Financial institutions, especially smaller ones, can punch above their weight by taking focused, strategic steps. The first is to conduct a clear-eyed analysis of your existing payment flows. Understand what payments cost your institution and your account holders. From there, identify low-hanging fruit, like the top 20% of check users who account for 80% of check volume, and create a plan to transition them to digital payments. The second piece is to address manual processes and fraud by leveraging artificial intelligence. Partnering with fintechs in the AI space can help you automate tasks, save money, and deploy sophisticated defenses against fraudsters who increasingly target smaller institutions.
Episode Highlights
The Heavy Lift of Faster Payments
Timestamp: [00:17:02]
Angela discusses the real-world challenges financial institutions face when modernizing their payment systems. Connecting to faster payment networks like RTP or FedNow is not a simple task. She describes it as a significant "lift" that requires extensive internal engagement from product teams, treasury teams, and others just to get buy-in. Even after securing approval, the actual development and integration process can be a "nightmare" that strains internal roadmaps. This operational difficulty has fueled the rise of third-party service providers who offer ready-made, easily integratable solutions, allowing institutions to adopt new payment rails without the massive internal effort.
"FIs don't necessarily have the resources to be all things to all account holders. We have seen this in particular in the faster payment space with FIs trying to onboard to the RTP network or the FedNow service. It's a lift. It requires internal engagement, your product team, your treasury teams, and so many people to have buy-in."
Meeting the 'Amazon-ified' Customer
Timestamp: [00:11:38]
The conversation explores how consumer expectations have been reshaped by on-demand services, a trend Angela calls the "Amazon-ification of customer expectations." People now demand the same instant, seamless experience from their financial services that they get elsewhere. This mindset means the fear of losing the customer relationship by partnering with a fintech is misplaced; that relationship is already at risk if the institution fails to meet these modern demands. Angela argues that the success of apps like PayPal and Venmo proves this has already happened, as consumers prioritize convenience. The opportunity is to use technology to enhance that core relationship, not fear it.
"I call this the Amazon-ification of customer expectations, because we want to order something and it gets to our door. People are definitely bringing that into their financial services relationships. Maybe we could step away from the fear that we will lose the customer relationship, because if we're being honest with ourselves, that's already happened in the space."
Addressing the Fear of Third-Party Risk
Timestamp: [00:13:02]
Host Elyssa Morgan introduces one of the biggest challenges holding institutions back from embracing fintech partnerships: the fear of losing control over risk. Anytime an institution hands off operations or customer experiences to a third party, there is a natural hesitation. This concern is not just a feeling; managing third-party risk is an expensive and resource-intensive endeavor. The conversation acknowledges that this hesitation around risk management continues to be one of the biggest barriers preventing institutions from fully embracing collaboration. While not the focus of the episode, its importance as a foundational challenge in the partnership journey is clearly established.
"You really can't talk FinTech partnerships without acknowledging one of the biggest challenges that comes with them, and that's this fear of losing control over the risk that they bring. Anytime you're handing off parts of your operations or customer experience to a third party, it's natural to feel uneasy, especially when you don't have the same hands-on control over how things are being managed."
A Call to Action for Institutions
Timestamp: [00:28:18]
Angela delivers a final call to action, encouraging listeners who are curious about fintech partnerships to be proactive. She emphasizes that there are people and organizations, like herself and NEACH, available to serve as resources. The key is to not be afraid to ask questions. She frames the act of listening to the podcast as the first step in the right direction. Angela urges institutions to reach out and voice their questions or concerns, reinforcing that they don't have to navigate this evolving landscape alone. The message is one of accessibility and support, aimed at empowering institutions to take the next step.
"If you are curious about FinTech partnerships, if you have questions or ideas about how technology can help solve problems within your institution, don't be afraid to reach out and ask. There are people like me. There are companies like Pidgin, there are entities like NEACH that are here to be a resource for you. There are no dumb questions."
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