Digital Ecosystems: An Era of Collaboration in Finserv

Digital Ecosystems
We speak to industry experts on the importance of digital ecosystems in financial services today and look at the future of finserv partnerships

Today, digital ecosystems are vital for the continuous innovation we see in the financial sector. 

Moving away from an era of control and secularism, more and more financial institutions are seeing the value of leveraging open APIs and today, we are in an era of increased competition and collaboration - which has seen the financial services industry thrive. 

Small-scale partnerships have made way for extensive digital ecosystems, as banks, fintechs and consultancies connect to drive innovation. 

In this roundtable, we speak to the experts who walk us through how far digital ecosystems have already taken the industry, and what the future may have in store…


  • Jamil Jiva, Global Head of Asset Management at Linedata
  • Ben Hunter, Financial Services Strategic Specialist at Cockroach Labs
  • Richard Butler, Data and Analytics Director at Slalom

How important are digital ecosystems for all parties involved (banks, fintechs, consultancies) today? How has PSD2 helped drive an era of collaboration in financial services?

Ben Hunter:

PSD2 ultimately aims to help drive innovative banking services, specifically around payments and account information services. 

Traditional and Digital banks have been developing open APIs in order to encourage third party solutions (such as fintechs) to leverage the data made available.

Further to PSD2, the new ISO20022 payments messaging standard changes have forced banks in particular to review their payments systems and make fundamental technology changes. 

Either to change or develop new payments systems themselves or leverage third-party payment providers (fintechs) for orchestration, gateway and the like. What this has also done is presented an opportunity for organisations to look closely at their business and decide where to scale back or put the effort in. 

In some cases we have seen organisations decide to invest heavily into expanding their business into new markets, or in some cases, defer large parts of their payment processing to a third-party outsource partner/solution to reduce overhead, management and risk.

We are more and more dependent upon technology. With a growing cashless society and the reduction of face-to-face services, the modern generation has high expectations in terms of quality of service in a digital era. 

Beyond open banking, we expect to see this further expand into the likes of open pensions which is in the works, as well as innovation such as augmented reality (AR) where banks are already trialing technology to build a more visual virtual banking world.

Richard Butler:

Digital ecosystems are interconnected networks of companies, often spanning different industries, that collaborate to create value for customers by combining their products, services, data, and technologies. 

This means that digital ecosystems extend far broader than banks and fintechs, and include non-financial companies. For example, a bank could partner with a fintech for advanced data analytics, a retailer for loyalty programmes, and a telecom company for mobile payments – creating a unified ecosystem that enhances the customer's financial life.

The importance of digital ecosystems lies in their ability to provide customers with seamless, personalised experiences by leveraging the strengths of different partners, and according to the World Economic Forum, have the potential to unlock huge value.

Prior to PSD2 (the revised Payment Services Directive), the financial services industry was relatively restricted, with banks acting as gatekeepers to customer data and payment systems. 

The common standards that resulted from PSD2 regulation have helped innovation in this space because additional payment providers have been able to partner in these ecosystems and offer a secure experience to end customers. 

PSD2 has also opened up this landscape by mandating that banks share customer data (with consent) and provide open APIs (application programming interfaces) to third-party providers like fintechs.

Walk us through some of the innovations digital ecosystems have helped bring about, particularly in terms of evolving legacy infrastructures.

Jamil Jiva:

The focus on data – quantity, quality and openness – that digital ecosystems foster has helped to modernise the legacy infrastructures that too often throttle efficiency and thwart customer-centric service delivery.

For example, asset management firms can use APIs to integrate real-time market data and analytical tools into portfolio management systems, providing up-to-date information for dynamic decision-making. 

By interfacing directly with data providers and internal systems through APIs, these platforms can automate many of the labour-intensive processes traditionally associated with data collection and analysis, significantly reducing the potential for human error and increasing the speed of response to market changes.

Moreover, integrating machine learning algorithms through APIs enables more sophisticated risk assessment models and investment strategies, tailored to the nuanced needs of individual portfolios. These technologies facilitate advanced scenario analysis and stress testing, enhancing the predictive capabilities of asset managers regarding portfolio performance under various market conditions.

Integrating into digital ecosystems not only streamlines operations but also makes asset management firms well-placed to rapidly adapt to new technologies and regulatory requirements without overhauling their core systems. This approach reduces both costs and operational disruptions, ensuring that firms remain competitive in a fast-evolving financial landscape.

Richard Butler:

When you purchase a Sky package you will find that it often includes a Netflix subscription and the ability to rent films on an ad-hoc basis - all of which are managed and paid for via the Sky subscription. 

Similarly, the technology platforms and the financial institutions operate as a seamless ecosystem to create value for the customer that was not previously possible. For example, digital ecosystems have allowed financial services to be seamlessly embedded into non-financial consumer experiences. 

Outside of financial services, companies such as Uber, Airbnb and marketplaces have disrupted traditional linear value chains by creating multi-sided digital platforms that orchestrate entire ecosystems of suppliers and customers.

There are plenty of times when digital ecosystems can go wrong. Equitable value distribution amongst partners can present itself as a challenge. We just need to look at the latest clash between TikTok and Universal Music regarding how much the app should pay artists. 

It highlights that incumbents and new platform players can have significant teething issues when trying to find a balanced ecosystem model that works for all. Additionally, data security and privacy when sharing customers’ banking information across different entities can also arise.

What makes a great ecosystem model? How can legacy banks better leverage provider/fintech relationships to drive digital transformation?

Jamil Jiva:

A great ecosystem model is characterised by its ability to orchestrate several applications, both homegrown and sourced from third-party specialist vendors. To achieve the intended positive results, firms must prioritise building a friendly interface to consume and share data with other providers in their digital ecosystem. This digital infrastructure should be intuitive, flexible, secure and resilient once scaled.

Legacy banks should look to strategic partnerships with specialist fintechs to accelerate digital transformation. Technological solutions from providers offering APIs can easily plug into existing systems, streamlining collaboration and accelerating digital transformation. 

The applications must use 'open APIs' that communicate in multiple 'standard languages' like JSON, GraphQL, and REST, enabling open and unambiguous communication between applications.

Richard Butler:

A great ecosystem model depends on two things. The first is asking the question: “How can we create value?” before looking at how one can partner with other parties to deliver this experience. The second is to understand one’s organisation’s role in the ecosystem. 

The key is to start with the customers’ needs.  There will always be one party that will be the interface with the customer and will need to disseminate certain information between the other parties in the ecosystem. This orchestrator role ensures cohesive delivery while allowing specialised partners to plug in their capabilities.

It is always a challenge when working out how open a platform should be for third parties to participate, therefore starting with a few trusted parties is key to helping build confidence. 

Legacy banks can, for example, leverage fintechs’ APIs or services, integrating best-in-class fintech solutions for capabilities like personal finance management or investment advice, into their own digital offerings. 

Partnering with fintechs that are already pursuing some of these digital ecosystems can also help legacy banks. Which would also help legacy banks provide a robust portfolio of services and share in the value created.

What does the future of digital ecosystems look like? Will open banking expand further to open data? What is the limit of digital ecosystems in financial services?

Jamil Jiva:

The future of digital ecosystems is likely to extend beyond open banking towards a broader concept of open data, encompassing multiple sectors and integrating various types of consumer data. 

This expansion will enhance the personalisation of services and increase operational efficiencies across industries. This growth must keep in mind data privacy, security, and regulatory compliance to ensure sustainable and secure expansion.

Also, generative AI shows potential for acting like an agile integration architect, automatically generating code and API calls to catalyse further innovation. 

The limits of these ecosystems will be defined by the extent to which they can innovate while ensuring compliance and security in an increasingly regulated global market.

Ben Hunter:

There is no limit to how digital we can become, but there will be a limit to how far regulators and country laws will dictate. Markets, Industries and very enterprise organisations will be watched with a close eye to ensure mitigation is considered from any kind of systemic risk or catastrophic failure. 

We are already seeing this from the PRA, FCA & BofE and DORA regarding resilience, and with data sovereignty laws where tighter controls are being mandated to ensure personal or sensitive data are controlled appropriately – such as Shrems II and other local country laws from India, China, Saudi and Pakistan to name a few.

Data residency is a big concern at the moment and we are seeing many of our clients – both new and existing – asking for our help to ensure they meet regulatory and country compliance by leveraging our data locality features and functionality. 

Adoption of digital technologies and new initiatives such as AI come with huge benefits, but they also come with risks.

Richard Butler:

In the UK, open banking has been facilitated by regulations like PSD2, which means that the largest banks can grant permissions to third parties to access customers’ data on spending transactions and regular payments. 

Some specific innovations have arisen, including money-saving Apps and websites that can recommend to customers how much they could put away each month. 

The question of whether this could extend to open data is far broader than financial services. The tech giants will play a key role in this process as they hold such a large volume of customer data. 

This means that even if regulations move towards this direction, it won’t be likely to happen any time soon. 

What is more likely, is a move towards open finance, the bringing together of financial products such as mortgages and pensions, so that they can be managed in one place even with individual products held by different companies.


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Ben Hunter
Jamil Jiva
Richard Butler

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