In a time where the digital world is shifting beneath our feet, the speed of technological change can feel like it has never been greater. Tech advancements achieve widespread adoption seemingly at breakneck speeds. Within the past year we saw the rapid evolution of GenAI and the swift adoption of ChatGPT, making this large language model (LLM) one of the fastest-growing services ever. With these changes, consumers, merchants, and businesses have reset their expectations for commerce.

At the same time, it’s important to remember that things typically take longer than anyone thinks. With this dynamic era of rapid advancement, “digital,” “personal,” and “simple” are no longer merely guiding principles—they’re likely to become table stakes. Fintechs are pivotal players in addressing the tangible challenges and can play a critical role in helping to solve the real-world challenges to achieving them. The invigoration of buy now, pay later and the rise of earned wage access are just two important advancements in the payments space that emerged from the ecosystem and were then embraced by the broader financial services landscape.

Roadblocks to digital monetary movement

Fintechs of all sizes are playing a central role in delivering real-time payments (RTPs), remittances for far-flung family members, government disbursements, cross-border business payments, and more. Yet there is so much further to go. While all of this innovation is fueling increased demand for quick and seamless experiences, there remain significant roadblocks to digital money movement.

Nurturing even the smallest fintechs is crucial in that context. As a former investor and someone who’s been in this space for a long time, I’ve witnessed how innovation can come from anywhere. Many startups seek to solve a problem, find product market fit, and grow rapidly. And many are capable of achieving true innovation, which may eventually become part of the fabric of our lives.

Let’s take a closer look at two big areas at seemingly opposite ends of the finance spectrum where partnerships are supporting fintechs in this era of acceleration and are having a big impact: blockchain and traditional banks.

Help technologies break through

Open-source technologies like public blockchains and crypto-based protocols have the potential to power an entirely new generation of transactions. Yet just like in the early days of the internet, skeptics question their ultimate utility. Use cases are constantly evolving, certainly. It’s still unclear which will become widely adopted, which will get left behind, and which have yet to be explored.

What’s clear is that there is a growing ecosystem of fintech developers building on top of these new platforms looking to leverage them to open vast possibilities for businesses, governments, and consumers, potentially influencing nearly every aspect of the global economy. Blockchain networks can power cross-border disbursements, efficient global settlements, and more.

Visa has been piloting how we can use stablecoins like USDC to improve cross-border settlement for issuers and acquirers. In September 2023, we expanded our pilot capabilities with Circle’s USDC, adding pilots with global merchant acquirers Worldpay and Nuvei, utilizing the Solana blockchain. These are important milestones in efforts to help modernize cross-border payment flows as central banks look to engage with the fintech ecosystem to explore ways to use central bank digital currencies.

Digital currencies can even help farmers and other small and medium enterprises improve their access to capital markets. Visa piloted this concept by working with partners to develop a programmable finance platform that allows farmers to securely fund and sell their crop harvests leveraging blockchain technology. The research work alone in efforts like this can be rich with insights into the technical and business complexities of creating an entirely new way of doing business, managing contracts, and making payments using new forms of digital currency.

Define a new era for bank-fintech partnerships

As banks and fintechs strive to build and capture tomorrow’s consumers and clients, each faces challenges on a macro level. The introduction of RTPs has ushered in a new era, transforming how transactions are conducted, and providing more opportunities for banks and fintechs to work together.

Within this evolving landscape, the launch of FedNow by the Federal Reserve Banks last year marked a significant milestone. This real-time settlement service allows financial institutions to send and receive payments instantly, heralding a multi-rail future that broadens the scope of financial transactions.

As the ecosystem changes in this new environment, banks and fintechs are finding new ways to align around common goals. Banks have an understanding of the financial ecosystem baked into their DNA. Fintechs are keenly tuned to the changing digital ecosystem and are often designed as product-first organizations. As both navigate this multi-rail future, they are working together to deliver solutions that meet the diverse needs of customers.

Banks, for example, are focused on digitization strategies to meet customers where they are. The introduction of FedNow and RTP rails has encouraged them to develop solutions that enable seamless money movement in and out of accounts. They are learning from fintechs how to improve the distribution of new products and services tailored to meet individual needs.

Fintechs, meanwhile, are playing a pivotal role in building experiences, orchestration layers and value-added services around real-time payment rails. They are leveraging this platform to innovate and move faster in enhancing their product offerings.

Like traditional institutions, fintechs are subject to fragmented regulations locally, which get exacerbated as they eye a global footprint. Many choose to partner with banks to offer products through existing licenses. Alongside these partnerships they can tap into the expertise and strengths of banks. Banks can benefit by diversifying revenue and gaining new customers.

The bottom line is that by working together, both can experience benefits.

I’m inspired every day by the hard work of founders and their teams, who are mission-driven to innovate and often focused on traditionally under-served communities. Fintechs have the potential to touch nearly every aspect of commerce, streamlining complexities for consumers, businesses, and government entities. It’s never been more critical to support their development, partnering with them so that they and the entire ecosystem can thrive.

Vanessa Colella is the global head of innovation and digital partnerships at Visa.