What's driving banking ecosystem evolution?
Open banking initiatives and the widespread adoption of digital technologies are driving the growth of banking ecosystems
Across the world, banks are in transition. As digital technologies proliferate and the rise of new market entrants - fintechs, insurtechs, challenger and neobanks - accelerates, adapting to this new environment is essential.
Enter, the banking ecosystem. Digital ecosystem banking is radically different, driven by a collaborative and partner-led approach.
In the next issue of FinTech magazine we consider the banking ecosystem in more detail. Considering the current trends driving this shift, and posing questions about banking's digital future.
As a teaser, and because this topic is vastly engaging and proves to be essential reading, here we share some of the key drivers changing the banking ecosystem landscape.
Customer attitudes
Customers demand integration and to be in charge of their finances - a product of the digital age in which we live. For banks, that means consumers that want to make their own decisions, and who are far more willing to embrace a self service model.
They are more likely to question traditional approaches, instead using whichever models and banks best suit their particular needs at a given time. Does that change the concept of loyalty?
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Technology
According to a report on banking ecosystems by Microsoft: “In our fully mobile, app-driven world, customers demand simplicity and are far less complacent when confronted with structural inefficiency."
Technology is driving all change in the financial services industry. According to PwC, for example, the ecosystem banking platform "is a network of APIs, digital marketplaces and platforms offering new distribution channels".
Competitors
Non-banks, challenger banks and competitors like Facebook, PayPal and Apple are disrupting the financial services sector. “From an ad hoc digital wallet to real-time payments, the blurring of industry lines and encroachment into traditional banking territory is the new reality," says Microsoft.
In order to remain competitive, launching ecosystems in industries characterised by the presence of large incumbent players may help ensure that new offerings rapidly reach a wider share of customers."
Our full report on banking ecosystems will appear in the next edition of FinTech magazine. Read the latest issue here.
For more information on all topics for FinTech, please take a look at the latest edition of FinTech magazine.