How can banks collaborate with consumer platforms?
As financial services organisations looks to digitise their products, collaboration with consumer platforms like Google and Facebook could be key, says KPMG
According to a report by KPMG, the reasons for collaborating with consumer platforms “should be self-evident to any bank decision maker”.
In its The Future is Open: Reshaping the Banking Experience, the global consulting firm discusses trends or technologies that could change banking.
On collaboration with consumer platforms it says that, with banks seeking further digitisation, expanding “beyond the confines of their traditional bricks-and-mortar service models” will be increasingly important.
The financial services sector is becoming more diverse. Incumbents in particular face greater competition not just from fintechs and challenger banks, but also big tech companies and other players.
Banking executives, says KPMG, realise that consumer platforms like Google, Facebook and others will be competitors in the future.
They also see strength in their business models and networks.
Banking and consumer platforms: collaboration is key
Scale of network and global reach are two reasons proposed by KPMG as to why collaboration will yield results.
For example, it explains, Google handles around 5.6 billion searches each day, while Facebook has a reported 2.5 billion monthly active users.
It adds: “None of the world’s largest banks even come close to comparing”.
However, reach aside KPMG cites the level of customer experience provided by consumer platforms.
Experience and personalisation are key drivers of change and new digital technology innovation in the financial services sector.
Consumer platforms and not banks - yet - have the technology to allow customers 24/7 interaction and the opportunity to bank wherever they are and however they wish.
On technology, KPMG also notes the capacity for data of consumer platforms when compared to banks.
The former, it notes, “provide a wealth of data across a much broader group of customers. What’s more, the data is already digitised, allowing it to be instantly mined and analysed.”
The current landscape
KPMG explains that several partnerships are already active in this space, including banks using social media to harvest data and improve engagement.
It also recognises that some banks are working with retail platforms and search platforms to explore new products and delivery channels.
One specific example given is Apple’s partnership with Goldman Sachs for the marketing of the Apple Card.
This, says KPMG, ties several options from Apple’s stable such as wallet and maps, to Goldman Sachs’ credit product “to offer a service that (it claims) rethinks everything about credit cards”.
In order to facilitate working partnerships with consumer platforms, banking executives should focus on several key steps says KPMG
Have absolute clarity on business drivers and objectives that will be delivered by the partnership
Drive optimum organisational agility
Ensure the correct skills and capabilities are developed
Be bold when it comes to leadership
Find out more about KMPG’s The Future is Open: Reshaping the Banking Experience here.
For more information on all topics for FinTech, please take a look at the latest edition of FinTech magazine.
Follow us on LinkedIn and Twitter.