WASHINGTON — The head of the American Bankers Association on Tuesday defended financial institutions' partnerships with fintech firms but argued that banks top nonbank startups in serving as "trusted custodians" for their customers' funds.

In congressional testimony prepared for a hearing on marketplace lending issues, Rob Nichols said linkages between banks and startups are a win-win. But he also touted the strengths that banks bring to the relationship.

"When banks innovate and partner with startups to deliver new technologies their customers win," said Nichols. But, he added, "Banks bring tremendous value to the table that is not replicable by startups, the most important being their role as trusted custodians of their customers' money and information."

While "establishing and growing customer relationships is the largest challenge for" startup firms, Nichols said, banks' record of "trust is backed by a strong culture of compliance and a regulatory framework designed to protect customers."

He also noted that banks' deposit funding affords "them resiliency to offer innovative products throughout shocks and credit cycles."

Banks "remain a visible presence, supporting their local communities as they always have through community outreach and countless hours of volunteering — something that cannot happen through a keystroke or algorithm," Nichols said.