How fintech founders can work with established financial institutions

For many fintech founders, securing a major financial institution as a customer can transform a business.

The attraction is obvious. Banks, insurers, asset managers and other financial organisations can provide significant contracts, strong references and access to markets that would otherwise take years to develop.

But founders frequently underestimate how different selling to a large financial institution is from selling to an ordinary commercial customer.

The first thing to understand is that enthusiasm is not the same as approval.

A senior executive may see a demonstration and immediately understand the value of the product. That is a very good start, but it is only a start.

Before a financial institution can enter into a meaningful relationship with a new technology supplier, other parts of the organisation are likely to become involved. Legal teams will want to understand the contract. Information security will examine systems and data. Procurement will consider financial standing. Compliance may ask whether the technology changes a regulated process. Operational risk teams will want to understand what happens when something goes wrong.

These questions are becoming more important rather than less important.

Financial regulators are placing increasing attention on third-party dependencies. New FCA rules taking effect in March 2027 will expand reporting around certain material third-party arrangements, reflecting the extent to which financial firms now depend upon outside technology and service providers.

Founders should not be discouraged by this.

The mistake is approaching a large institution as if its procurement process were an unnecessarily complicated version of an SME sales process.

It isn't.

The institution is considering a different category of risk.

A good fintech founder therefore needs two propositions.

The first explains why the technology is useful.

The second explains why the customer can safely depend upon the company providing it.

Young businesses usually spend most of their time perfecting the first. Successful institutional suppliers learn to take the second just as seriously.

This begins with preparation.

Before approaching a major institution, founders should be able to explain their data architecture, security arrangements, business continuity planning, ownership structure, insurance, financial position and relevant regulatory status.

They should also understand where their technology sits within the customer's operations.

If the product stopped working for twenty-four hours, what would happen?

If the company failed, could the customer retrieve its data and move elsewhere?

If a cyber incident occurred, how quickly would the customer know?

These are not negative questions. They are the questions responsible institutions are required to consider.

There is also a commercial lesson here.

Founders naturally want their first large institutional contract to be as substantial as possible. In practice, a well-designed pilot may provide a better route.

A narrowly defined project allows both sides to establish whether the technology actually works within a live institutional environment.

But the pilot needs to be designed with a commercial outcome in mind.

Too many start-ups celebrate the announcement of a proof of concept without agreeing what success looks like. Six months later they have delivered an interesting experiment but are no closer to revenue.

At the beginning of a pilot, both sides should understand what is being tested, how success will be measured, who owns the commercial decision afterwards and what the route to a wider deployment would look like.

There should also be an internal sponsor.

Large organisations are complicated. A founder needs somebody within the institution who understands the problem, believes the technology may solve it and is prepared to help navigate the organisation.

Relationships therefore remain extremely important.

The City provides an unusually good environment in which to build them. Financial institutions, investors, advisers and technology businesses operate within a dense professional network, which is one reason the Square Mile continues to attract both established financial businesses and early-stage technology companies.

For Rosary Capital, helping companies navigate this relationship is an important part of our approach.

Capital alone cannot shorten every procurement process or guarantee a commercial contract.

What it can do is give founders sufficient time and resources to build their businesses properly, while introducing them to people who understand how institutions make decisions.

The most successful fintech founders learn to speak both languages.

They retain the urgency of an entrepreneur while understanding the responsibilities of an institution.

That combination is powerful.

Because the objective is not simply to persuade a bank to try something new.

It is to become the sort of company that a bank is comfortable depending upon.