Wednesday, November 27, 2019
Sankar Krishnan, Capgemini executive vice president and author of The Power of Mobile Banking, published by Wiley in 2014, noted that the evolving financial services environment requires high scalability, high security and high throughput monitoring to predict losses and errors before they happen. Open APIs and banking infrastructures facilitate these capabilities, but banks must become more agile and innovative and offer more digital services, he stated.
“Open banking and APIs have changed traditional banking,” Krishnan said. “Banks need an open model that embraces technology to be agile and innovative and offer more digital services. Unlike the old days, technology architecture has moved from monolithic code to decentralized microservices that use API banking and cloud technology.”
According to Krishnan, today’s fintechs and banks are collaborating like never before. Fintechs are using data to differentiate and create a better experience for banks and brands. Banks are doing the same things while leveraging their vast consumer network, he stated. Together, fintechs and banks are redefining the future and the roles they want to play. To successfully participate and compete in the new environment, players will need new T-shaped skills that combine generalist competencies with professional specialization, he added.
Research, based on a global survey of more than 7,900 retail banking customers and 50 banking executives in 20 countries, found that 75 percent of tech-savvy customers use at least one financial product from a “BigTech” enterprise. Top reasons given were lower costs (70 percent), ease of use (68 percent) and faster service (54 percent). Researchers found that while open banking is bringing banks and nontraditional players together to integrate banking and digital services, only 33 percent of banking executives surveyed have implemented open banking.
Vincent Bastid, secretary general at Efma, remains optimistic that collaboration will continue between banks and fintechs. “Even though open banking adoption has been somewhat slow, it and its evolution to Open X, are the best ways forward for banks to compete in the increasingly crowded and diverse financial services landscape,” he said. “Open X is how banks will provide customer experience in the future, and not preparing for it now will result in missed opportunities and lower market share.”
Bastid summarized the findings as a wake-up call for banks to become more inventive and collaborative, ideally by partnering with fintechs that have complementary product portfolios. This will help to enhance service delivery and boost sales by leveraging effective collaboration, he noted. Additional information about the research can be found at www.worldretailbankingreport.com .
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