Fintechs are building global platforms: what can banks do about it?

It’s funny how things go around and come around again. For years, I’ve been bemused why banks cannot merge and be successful across borders. There have been almost zero European bank mergers of any size that are cross-border and the few that exist – Santander, Unicredit, Nordea to name a few – have all found it difficult for the reasons I stated yesterday.

But technology is changing this dramatically which is why, years after I predicted it – 2017 to be exact – fintech firms are building platforms and partnerships to reconstruct financial services into a system that is no longer domestic or national, but integrated and global.

Interestingly, three years ago, there was a significant announcement that Stripe will allow retailers to add Klarna’s buy-now-pay-later service as a purchasing tool for customers. Three years later, they’ve just deepened this partnership into a full-blown relationship, as Klarna and Stripe strengthened their partnership this week. What are they doing? Well they’re taking the offer of integrating payments and BNPL to merchants in more markets.

Global payments company Klarna has expanded its partnership with payments infrastructure provider Stripe, extending buy now, pay later (BNPL) services to merchants across 25 countries. 

Merchant acquisition rates doubled in Q4 2024 as a result of this strengthened collaboration, marking a significant shift in the payments landscape.

There are some interesting takeaways from this announcement but, for me, it represents the gradual deconstruction of financial processes into component parts.

As stated consistently, a bank that does 1,000 things can never compete with a start-up that does one thing better. The Stripe-Klarna partnership demonstrates something else, namely that if a group of companies can partner through cloud, APIs and data, then they can start doing things that substantially replaces the structures of the past. This is what I believe is happening.

“At the core, Klarna is a global network connecting 85 million active consumers with retailers. The more retailers we add, the more consumers we attract and vice versa. The ambition is to make Klarna payments available everywhere, for everything, all the time.”

David Sykes, Chief Commercial Officer at Klarna

But it’s not just Stripe-Klarna as I was also intrigued by the recent announcement of Nubank (South America) to partner with Tyme Bank (South Africa) to grow markets in South-East Asia. This was as part of Tyme’s Series D funding round, led by Nubank who invested $150 million. Why?

David Vélez, founder and CEO of Nubank, added: “Since the beginning of Nubank, we have believed that the future of financial services globally is of digitally-native companies. We have met dozens of teams across different geographies, and we think that Tyme Group is extremely well-positioned to be a digital bank leader in Africa and Southeast Asia. We are excited to work with Tyme to share many of our learnings of scaling this model to hundreds of millions of customers.”

And it’s good news for Tyme Group.

“Nubank transformed financial services in Brazil. We are excited by the value that Nubank's thought partnership and advice can bring to Tyme particularly in areas such as data analytics, credit risk management, product development and marketing - levers we believe are key to achieving leadership in our markets. This is a moment of great significance for Tyme”, said Coen Jonker, Co-Founder and CEO of Tyme Group.

These relationships are growing day by day, and the core challenge for traditional firms is that statement by David Vélez: “the future of financial services globally is of digitally-native companies”. I feel like I’ve been saying this for years, but it is finally happening. Thing is that the way it is happening is groups of like-minded disrupters partnering to create global financial offers that are digitally native and far exceed the services offered by a single company trying to do all these things.

#justsaying