Scotiabank-Kabbage partnership

Scotiabank-Kabbage partnership

Question 1: What are the success factors in the Scotiabank-Kabbage partnership?

Organizations come up with partnerships so that they can benefit (Bergart, 2015). Some partnerships succeed, while others fail. The failure or success of a partnership is brought about by some factors. The Scotiabank- Kabbage partnership succeeded due to some factors. First of all, the two organizations supported each other. Scotiabank was able to cooperate with Kabbage, which is an online financial technology company.

Through cooperation, Scotiabank was able to learn how to work with a fintech partner. The bank majorly deals with large businesses, but with the partnership, it was able to learn an innovative way to lend money to small businesses. The other success factor was trust. Kabbage explained how the product and the business model would work. By so doing, Stewart and his colleagues trusted Kabbage. So, they decided to work with it, and later on, it succeeded. It is worth noting that without trust and cooperation, a partnership cannot succeed.

Question 2: Under what condition is the same model applicable? When will the Scotiabank-Kabbage model not work?

The partnership model differs from the agreements that have been put in place. In most cases, there is a partnership agreement that contains terms. The Scotiabank-Kabbage partnership was based on licensing contracts (Hsieh, 2017. It was more of a technology licensing since Kabbage was a technology company. In this case, Scotia was the brand facing the customers. So, this meant that Kabbage was a technology provider that operated in the background.

This model is applicable under the condition that there is an organization among the partners who operate in the background. In most cases it may apply where a technological organization is used for support purposes.

The Scotiabank-Kabbage model may not work in cases where both organizations want to be the brand facing the customers. The organizations will find themselves fighting for the customers’ attention instead of cooperating. In any case, there will be no cooperation, and the partnership will end failing. So, the only option is for one organization to be the brand facing the customers while the other operates in the background.

Question 3: Under what circumstances should Scotiabank seek fintech companies?

Fintech companies are becoming popular in the current century (Varga, 2018). The main reason behind their popularity is the fact they make use of blockchain technology. Blockchain technology allows customers to transact without involving intermediaries such as banks. The main circumstance which can make Scotiabank seek fintech companies is when the customers have reduced. Scotiabank should seek fintech companies to increase the number of customers. By having a partnership with fintech companies, it will be able to attract more customers. Many people prefer making transactions comfortable and minimizing transaction costs. Fintech companies allow customers to transact within the shortest time possible. They also reduce the transaction cost.

Question 4: A sector and geographic market where fintech partnership would create value.

Blockchain and international payments sectors are one of the leading sectors which can create a significant value (Patil & Puranik, 2019). In my opinion, Fintech should consider the blockchain sector. The blockchain sector is taking over the financial sector. Blockchain has made transactions faster. There are other advantages that blockchain offers the customers, and this is an assurance that it will keep on growing. The transactions are made any time of the day provided that one has an internet connection. This aspect brings about efficiency.

Some countries don’t fully support blockchain while others support technology. A fintech partnership will work best in a geographic market where there is support. So, this means that fintech organizations should consider setting up their operations in countries that offer full support. Scotiabank should consider the USA, China, and Australia since they support fintech companies. However, Scotiabank should be ready to respect the regulations which these countries have set concerning blockchain.

Question 5: Recommendations

Scotiabank should be ready to form a partnership with fintech companies. The partnership will be useful since it will help attract customers. When choosing a partner, there is a need to consider some factors. The factors should be well explained in the three-year plan. First of all, Scotiabank should consider the size of the Fintech company as well as the profits made. There is no need to form a partnership with a company that will bring failure instead of success. Scotiabank should consider trust and cooperation. If it doesn’t trust the fintech company, then there is no need to form a partnership. The plan should also contain the main reason for creating the partnership. The main reason to form a partnership will be to improve the productivity of the bank by maximizing the number of customers. Scotiabank should follow the licensing contract model when creating the partnership.

Question 6: What challenges is Scotiabank facing in the blockchain sector? What are the implications for the bank’s blockchain partnership strategy?

Scotiabank is facing several challenges when it comes to the blockchain sector. Some governments and even people do not trust blockchain due to the security issues which are associated with it. Some investors are afraid to invest since they do not want to lose their investments. Some of the regulations which are put in place may hinder the bank from making more profits as expected. If Scotiabank intends to survive in the blockchain sector, then it must address some of the challenges. It will need to ensure that the investors, as well as the customers, trust it. The trust can be brought about by ensuring that there is the security of the investments and the data involved. Scotiabank should comply with the regulations given by the local authorities.

Scotiabank should be focused on forming a partnership with fintech companies. The blockchain partnership strategy will be profitable. Within the next five years, blockchain will be accepted by a large percentage meaning that the customers will increase. If Scotiabank doesn’t ensure that the strategy doesn’t succeed, then it will not be in a position to enjoy these benefits. Therefore, the bank should do all that it takes to ensure that the strategy is achieved.