This article was published in the Fintech Special of the Netzwoche of July 2018.
The financial world is changing: Customers expect new services, customized products and services, and have themselves become an integral part of the business model. But how do banks get fit for this paradigm shift and what role does Fintech play in this?
Customer behavior has changed significantly in every industry in recent decades. Bank customers, who recently used e-banking in their classic home on their desktops, now manage their smartphones anytime and anywhere thanks to mobile banking
Finances. Today, the customer has even become part of the business model, taking care of onboarding, address changes, and similar customization. Furthermore, increasingly intelligent technologies such as bots are calling for the realization of new business models. At the same time, technology is becoming more affordable, and every customer carries a supercomputer in his pocket, with which he can draw digital services at any time thanks to powerful Internet bandwidth. In addition, technology is becoming more and more applicable to non-professionals, so customers can use 3D printing to conveniently print their personal bank cards at home or in the office.
Established banks meet fintech start-ups
Proven fintech companies and start-ups have mixed up the financial industry with disruptive ideas. In this context, two key topics are driving today's financial industry:
- Banks will increasingly cooperate with fintech start-ups and companies.
- Fintech start-ups and companies will push banks to become more agile.
Fintech requires a rethink
To be in the fintech age, banks need to rethink in five steps:
- Agility means time-to-market: Today's change is the normal state, and lengthy projects are quickly out of date. It is important to generate real added value quickly and to test it immediately on the market.
- Sharing has taken place: Swiss big banks have understood that not everything can be developed on their own. However, they must increasingly enter into partnerships with fintech companies instead of just seeing them as service providers. Only then can they benefit from possible synergies.
- Small steps, big impact: Banks are getting more and more microservices available that allow quick and easy integration with a lot of customer benefits without having to turn the whole company upside down.
- Open interfaces start closed systems: every collaboration also brings with it a mutual opening. The same applies to the integration of different systems. Open Banking or Open API is the solution, and the current PSD2 directive not only opens the market for new, payment-intensive payment service providers, but also increases security and stability thanks to stricter requirements.
- Understand and apply: Only if each employee understands what kind of change is currently taking place in the Swiss financial industry and what a change of mindset is required of both the management and the employees of the banks can be considered a successful one
- Transformation to be spoken in the digital age. We humans increasingly have to rely on our human abilities and want to fight less against more intelligent systems.
Author: Aniello Bove, CEO and Partner, andrion