Creating the world’s largest transportation company without owning cars or the world’s largest hospitality company without owning a single property – digital technologies have not merely transformed entire industries, they have managed to upturn many established business models and mindsets.
Sooner rather than later, the banking industry will also be subjected to the power of digital to distribute, decentralize and disintermediate. Not even the most resourceful banks will be able to single-handedly create a portfolio of products and services with the features and functionality to cater to every banking need. In an uberized banking model, one-click banking will be embedded into a range of customer facing services that are all part of one collaborative ecosystem.
Collaboration, cooperation and co-opetition are increasingly becoming part of the vocabulary in an industry where most players have thus far operated as islands. Sometimes it is the pressure of regulation, as in the case of PSD2, which compels banks to open up their payment APIs to other service providers. In other cases it is well placed self-interest. An example is the increasing collaboration between banks and their potential disruptors, namely, Fintech startups, to ramp up the quality and pace of innovation.
Universal banking in the digital paradigm will see banks leveraging collaboration and co-opetition to curate an aggregated ecosystem of financial and non-financial products and services that are relevant to the customer experience. These universal banking ecosystems will evolve continuously in terms of core functionality as well as scope and scale of service. API-driven collaboration strategies, for example, would enable banks to react quickly to new technology opportunities, like wearables and IoT, and accelerate innovation at the edge of the enterprise. Collaboration and co-opetition would also mean that banks will finally be able to address the niche needs and requirements of long-tail segments and markets.
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