Pushed by surging demand for tap-and-go everything, banks are embracing fintech startups as channels to innovation instead of engaging in an all-out war to shut them down. This race for fintech solutions doesn’t stop at specific partnerships; it’s leading to fintech ecosystems.

Bill Jacobson, CEO and Founder of Workbar, a coworking network across the Greater Boston area, has created a relationship with Digital Credit Union, one of the largest credit unions in the US. They have a space that hosts fintech companies for six months.

The arrangement is a quid pro quo.

“The [startups] get to work with DCU and see real problems. It’s a great way for them to develop beta customers, accelerate the effort to work on real issues. It gives them space and access to the Digital Credit Union management team as well,” Jacobson says. Meanwhile, Digital Credit Union is “doing this to get closer to startups and new ideas..”

Google, Apple, Amazon Service

According to PwC’s March 2016 report, Blurred lines: How FinTech is shaping financial services, consumers expect the same service and innovation from banks as they do Google, Apple, and Amazon.

.@Scotiabank‘s @jeffincanada at #BDCfintech: Customers aren’t comparing us to banks. They’re comparing us to their last online experience.

— Tech /NWSRM (@TechNWSRM) April 4, 2016

The fintech division of Toronto’s MaRS Discovery District – a startup incubator – is another example of the cooperation growing between banks and startups.

“There’s not necessarily a threat, or friend-or-foe sort of mentality” among banks sponsoring programs at MaRS, says Adam Nanjee, head of MaRS’s fintech division.  “They want to work with the startups.”

Financial institutions are wrestling with the competitive implications of fintech. The PwC report says 20% of their business is at risk by 2020, so many are already partnering with more nimble, innovative startups. Funding of fintech startups last year reached $12.2 billion.

Gregory Melchior, a startup co-founder who previously worked at Bank of Montreal and Merrill Lynch, says: “If you’re standalone you’re not going to survive. You need to have a white-labeled solution and work with the banks.”

For more on the fintech threat facing financial institution, read Startups Eat Into the $4.7 Trillion Financial Services Industry.