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FinTech and the Parent-Child relationship

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Another theme that I talk about regularly, and that came up last week, is the FinTech relationship being like a parent and child. The parent wants safety and security and a nice stable home; the child wants to run around and kick and break everything, and challenge everything the parent thinks.

That’s good, but it is difficult for banks to work with start-ups, when the start-up is kicking and screaming how stupid the bank is. Like a child, the start-up has no idea why the world works the way it does and all they want to do is change it. The parent then sighs, as they’ve seen and done it all before, and waits until the child falls over to then pick them up and help them.

This symbiotic relationship between parent and child, bank and start-up, is at the core of my thinking about the current wave of FinTech developments, where banks are talking all about co-creation, collaboration and co-operation. How should banks work with FinTech start-ups?

Well, going back to the parent-child analogy, what role does the parent play for the child? It’s obvious. They act as mentors, educators, nurturers and investors. They help the child to learn and grow, sometimes fall over but always pick them up. As Confucius said:

“Our greatest glory is not in never falling, but in rising every time we fall”

Too right.

In this new world of partnering, co-creation, collaboration and co-operation, banks need to place themselves firmly in the mentoring parental seat. Now this is not easy when you have the daftpunk child. Some banks, because of their control freakery and arrogance, will end up in a patronising and condescending stance. They will talk down to the child, slap them and lock them in their bedrooms with no food because they want to ground them. These banks will fail in their co-creation, collaboration and co-operation efforts, as that attitude does not work. The child will just open the bedroom window, slide down the drainpipe and escape.

If a bank is truly serious about co-creation, collaboration and co-operation, then they need to be completely open and tolerant of their start-up children. Yes, the kids will run around, break things, argue and challenge, but that is brilliant because it is exactly what we need.

Why do you do things that way? Why not this way? Do you really need all this checking? Why do you think the regulator won’t approve it? Have you asked them? and so on and so on.

A bit like the child who is growing from the developmental phase to the sentient phase, the FinTech start-ups are going through the same. A true banking partner will be tolerant and supportive of this process, not dismissive and patronising.

Think about how a child grows up. According to the World Academy, there are six distinct phases:

  • Unoccupied play – The child is seemingly not engaged or actively playing with others at all. They may remain stationary and be engaged in random movements with no objective. This stage of play is mostly seen in newborns and infants, between the ages of 0 and 2. This is an important setting stage for future play exploration and development.
  • Solitary play – During this stage of play, children will often play alone, with toys different from those of others, and be uninterested or unaware of what others around them are doing. This stage of play is most commonly seen in young toddlers between the ages of 2 and 3, but it is important for children of all age groups to participate in from time to time. Solitary play is common at a young age because cognitive, physical and social skills have yet to fully develop. This type of play is important because it teaches children how to entertain themselves.
  • Onlooker play – Onlooker play is when a child observes others playing but does not join the play. They will frequently engage in other forms of social interactions such as conversations to learn more about the game or play that is going on.  This type of play is common in younger children between the ages of 2½ and 3½, but can take place at any age.
  • Parallel play – This occurs when children play side-by-side from one another, but there is a lack of group involvement amongst them. They will typically be playing with similar toys and often times mimic one another.  Parallel play is common in toddlers between the ages of 2 ½ and 3 ½ but can take place at any age. Although it looks like there is very little contact between them, these children are learning valuable social skills and actually learn quite a lot from one another. For this reason, parallel play is important as a transitory stage for the development of social maturity, which is key to later stages of play.
  • Associative play – At this stage, children will begin to play together, but not focused towards a common goal. A child will be more interested in playing with other children around them than the individual toys they play with. Associative play is slightly different than parallel play as children may continue to play separately from one another, but they start to become more involved in what others around them are doing.  You may find children playing or trading with the same toys or actively talking with or engaging one another, but no rules of play are being set. This type of play typically begins around ages 3 or 4, extending into the pre-school age. This is an important stage of play because it develops necessary skills such as cooperation, problems solving, and language development.
  • Cooperative play – Cooperative play is where play finally becomes organized into groups and teamwork is seen.  Children are now interested in both the people that they are playing with as well as the activity at hand.  The group is more formalized with a leader, as well as other assigned roles, and play organizes around accomplishing group goals or specific tasks.  Cooperative play begins in the late preschool period, between the ages of 4 and 6. It is uncommon to see children reach this stage until these later years, as it requires an evolved set of organizational skills and a higher degree of social maturity. Cooperative play is indeed the culmination, bringing together all the skills learned across previous stages into action, giving the child the necessary skills for social and group interactions.

Now apply this to the world of FinTech start-ups and it makes absolute sense why they began by saying let’s destroy and disrupt banking to let’s partner and work with banks. It’s also why we’re now in a co-operative, partnering, co-creation world and no longer in that Them-versus-Us world.

Banks are parents. Parents are mentors. FinTech start-ups are children. Develop the children.

Chris Skinner Author Avatar

Chris M Skinner

Chris Skinner is best known as an independent commentator on the financial markets through his blog,, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal's Financial News. To learn more click here...

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