From competition to co-opetition
Many Fintech players already own the characteristics that banks desire. Banks are not protected from obsolescence and the risk of disintermediation is real. Industry risk profiles are being redefined.
Banks are focusing on open innovation, which is at the heart of the digital transformation, engaging with external technology solutions, knowledge capital and resources early on in the innovation process.
Banks need to adopt a flexible, customer-centric strategy. They must become more responsive to cultural change, manage a digitally savvy workforce, keep pace with regulatory and security demands and explore the technologies that underpin the new wave of value networks.
Eighty-nine percent of banking business and IT executives said they are already either using or experimenting with APIs and industry platforms
Three fundamental “truths”
Banks must consider:
Platforms rule. Using platforms, banks can build an ecosystem of partners that operate outside current industry boundaries to establish disruptive revenue streams.
Data is the new currency. Traditional detailed data on customer interactions contains vital information around developing a better and more tailored online/mobile presence (such as improving cross-selling opportunities), which gives banks a considerable advantage over Fintechs.
Agility is key. A “faster,” more agile organization, where every aspect of the business excels, is better equipped to compete at speed. Banks need to avoid a linear or incremental perspective and be prepared to manage the resultant risk.
Digital eco-systems open up new ways to reach customers, work with suppliers and unlock value.