Large banks spend thousands of millions on technology. 90% of banks want to buy from Tech and Fintech companies, yet nearly half of all signed contracts failed to Go Live. How do we fix this, asks Simon Taylor, Head of Strategy and Content at Sardine and founder of 11:FS.
I’ve been selling to large banks for 10 years and worked for a bank helping startups get deals internally for 5 years.
Here are the most important lessons I learned when selling to banks (or any large enterprise).
1️⃣ Why would you want to sell to an incumbent?
They sign long contracts (5+ years) for large sums. They’re less worried about price and more worried about performance.
Their complex tech stack and being highly regulated means they need
A) Every certification
B) Detailed policies and procedures
C) Massive throughput / low latency
2️⃣ Understand their world
A) Their tech stack is hard to change with 1000s of systems. Adding anything new is complex.
B) A meeting isn’t a deal. You might meet “Head of X” but from that to signed deal usually takes years.
C) Relationships matter. Understand their world, their pressures and stay patient and you can capture the opportunity.
3️⃣ They have a complicated buying process
A) Innovation teams have Proof of Concept budgets. You can get $50k or $100k to prove your product could work but still have low odds of success long term
B) Becoming an “approved supplier” is hard. Countless forms, processes and sign-offs are needed, not obvious which at outset
4️⃣ Their buying is designed for big, not small
A) The incumbent has no downside for going slower in a negotiation for a startup that can cost survival. Manage with advocates and senior buy in.
B) Don’t assume integration will be easy for them. 81% of banks struggle to integrate with a tech company because the bank lacks experience with APIs.
5️⃣ The gatekeepers matter.
A) Legacy providers are already in and likely have a competing product. Sometimes good > great if it can be operationalised
B) Consultants run the show. They recommend vendors for Requests for Information or Proposals and manage integration.
C) Other Fintech companies can be frenemies. Requests for Proposals look for “comprehensive solutions,” but sometimes that comes from a combination of providers, not one company.
6️⃣ Set yourself up for success
A) Document your processes, and get your certification in order.
B) Sell to the “awake at night” pain point like new regulations
C) Find partners who care about your success like legacy providers or consultants
7️⃣ Closing thoughts
There’s an old saying that “incumbents want to be first to be third.”
They want innovation only if it's secure and robust enough for their scale.
But don’t worry; there’s always one that will make a leap.
Find your advocate; find someone who can get it done, and one will lead to many.
Simon Taylor is the Head of Content & Strategy at Sardine. Simon has been immersed in the technology of financial services for as long as he’s been working and is consistently voted one of the most influential people in Banking, Insurance and Fintech by banks, his peers and a number of industry bodies.
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