The Analysis of Scotiabank case study
Introduction
Scotiabank was among the best financial institutions in North America, Roding financial services to customers within America and across Canada. The institution worked in a chain of branches within the two regions. However, it reached a point where it became difficult to provide its functions to Canada’s customers. For this reason, Scotiabank looked for a way to maintain its customers and ensure their customers in Canada received their services effectively from their branches in that region. The bank implemented new technology, the Multi-Protocol Label Switching network, which enhanced a chain of partnering workstreams. With this networking, the company sustained the competition from other banks and continued serving its customers across America and Canada. A Scotiabank-Kabbage partnership is a critical aspect in the transformation set by the financial institutions. Kabbage provides loans to small businesses by analyzing their payback behaviors. It also discovered mobile lending growth and took it as an advantage to offer better loaning services in the banking sector. Their partnership is of importance to the small businesses in Canada and Mexico. The customers of the Kabbage adopted the technology and could access funds using the technology and that of Scotiabank.
Factors for the success of Scotiabank-Kabbage Partnership
When organizations enter into a partnership, both of them benefit. Although some of the associations fail, most of them succeed due to some specific factors. In this case, their partnership grew because of the kind of support the two firms had for each other. Scotiabank corporate with Kabbage, and it was able to work with it at the same pace. In addition to this, Scotiabank was a big industry, and it borrowed the innovative way of lending funds to small businesses from Kabbage. Another factor for their success is trust. Scotiabank trusted the ideas Kabbage had about how their partnership would work, and together they decided to work, and they finally succeeded.
The nature of the Scotiabank-Kabbage model
The model is an example of every other partnership where a contract binds it. The model operates on the condition that one is superior, acting as the brand to the clients and the other one working at grounds level. What makes this one different is that their partnership is based on a technology-based licensing contract. Kabbage is a technology company, and in their arrangement, it could provide the technology services in the background, while Scotiabank acts as the brand to the customers.
The Scotiabank-Kabbage model would not work in a condition where each of them wants to lead and be the top brand in the customers’ sight. This situation will make the firms enter into a fight to grab customers. It will create a hostile environment where the two firms are not cooperating, and it would fail. Therefore, the two must agree, one to operate on grounds level and the other to be the brand facing the clients.
Circumstances that will lead Scotiabank to look for Fintech companies
Fintech companies are currently gaining popularity due to the blockchain technology they have adopted for their operations. Scotiabank would only seek Fintech company when its customers have decreased, and it wants to bring the number back to an average level. Scotiabank will adopt the blockchain system, and it will make them attract more customers. Blockchain technology allows a transaction to occur in a short time and at low costs.
A sector and geographic market where Fintech partnership would create value.
According to my observation on the technological systems, FinTech should put in priority blockchain technology. The technology seems to be gaining and overtaking the average finance sector. The reason for this is that blockchain technology is getting more competitive since it offers instant services. But for the system to work well, it requires a geographical area where there is full support by the customers and other financial institutions. Some of the places that have supported include the countries that have already implemented blockchain technology, like China.
Recommendations
I think Scotiabank should consider some factors while choosing a partner. This factor to be included in the three-year plan with detailed information. It should also consider partnering with the Fintech companies since there is a likelihood that they will earn a lot of profits together due to the kind of technology they use. The three-year plan should also explain why they are opting for partnership and the right procedures to be followed while entering into such contracts.
Challenges Scotiabank is facing in the blockchain sector.
Several people lack trust in the blockchain system since they believe it is not the most secure method of handling financial services. The insecurity reasons make the investors not invest their money there, due to fear that they may lose the interests and the principal amounts. In addition to this, the data associated with the blockchain system is not secure, and the customers may withdraw from getting services from the institution.
Conclusion
The partnership is an essential concept for the industries that are seeking a competitive advantage in the market. Blockchain technology is an emerging issue that will have gained acceptance by a large population in the coming few years. Scotiabank should therefore consider partnering with fintech companies to grab the benefit of working together as a team.