Collaboration is key in this #ConnectedWorld, never more so than in the world of banking and fintech where customers are calling the shots and their appetite for change is increasingly driven by technology. Here, collaboration becomes the smart – the only – way for banks to keep up.
Evert Vandenbussche of KBC Ireland makes the point well in his articles for the Digital Banking Club blog, where he describes the "increasing crossover between technology companies and banks as a win for customers and the whole financial services sector."
He goes on to say: "When the two sides work together, the business benefits can be massive. Where Fintechs excel in agility, customer centricity and technology, incumbent banks have a broad customer base, are trusted, can navigate the regulatory environment and have access to capital."
Ultimately, the key to collaboration of any kind is to keep it as flexible and open to change as the customers that are driving it. For banks, this means opening up technology platforms and building APIs that allow new third party solutions to be easily plugged in (or indeed unplugged) as customer behaviour evolves. It's about building a true, mutually supportive ecosystem that continues to serve the customer's needs, while at the same time providing a basis for the various service providers to survive and thrive.
The following is an excerpt from Evert's article, "Collaboration is the shape of the future", published in two parts on the Digital Banking Club website. Both articles are available here.
Today's customers are changing the way they access products and services. It is happening across a range of industries and activities – from taxis and shopping to HR and workflow. Customer appetite for that change is often being driven by tech companies bringing innovation to deliver traditional outcomes in a more convenient way.
Uber and Hailo are redefining the taxi service; online check-in and mobile-stored boarding passes simplify flying; Amazon makes shopping possible anywhere, anytime, forcing high street shops to close. In business, employees can access anywhere, anytime and from any device, cloud-based sales and project-management tools from Salesforce, Workday and Clarizen, backed up by top-notch customer support and service. As a result, an increasing number of users expect convenience in everything they do. Financial services are no exception to this new reality.
It's a fact. Not good or bad, and one everyone must react to if they want to remain relevant. There is increasing crossover between technology companies and traditional service providers. It's time to catch up. It's time to embrace new technology.
Today, banks might have a nice looking front end, but it is more than likely to be sitting on complex legacy systems, limiting its underlying capabilities. This leaves them vulnerable to having their customers poached by more capable rivals, who are better equipped to provide financial services when and where the customer needs them.
There has been no change in the need for financial services. Actually, they remain very stable over time. Customers want to lend, save or transfer funds. What is changing rapidly is how they want to have access to these services. Customers have gotten used to having access to all kind of services via digital channels and they expect financial services to be delivered with the same speed, cost, performance and convenience than any other digitized service. Wherever the customer experiences friction in the products or processes the bank delivers, Fintechs have sprung up: in traditional services like loans, mobile wallets, payment services, but also in value-adding services on top of the typical banking services like PFM. Fintechs excel in addressing a niche need. Look at Paypal, a tech company that started by offering convenient payments to support an online auction. Today, it is a licensed bank, able to offer loans. It's smart at fulfilling its customers' needs.
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Evert Vandenbussche is Chief Operations Officer at KBC Ireland