The Future Of Digital Banking

Traditional competitive and industry lines are fading into the background as fintech providers and commerce platforms offer a greater array of banking services. Fintech represents both risk and opportunity: the risk that fintech providers will poach margin-rich or relationship-oriented business and the opportunity to partner with or buy those companies that have a freer hand and more natural mindset to innovate.

Like any startup community, the fintech market can be volatile. Some will evolve gracefully, some will crash, some will soar, and some will be acquired and be a new strategic threat to you. On the other hand, commerce platforms can scale — rapidly. You will need to be digitally astute and digitally nimble to win in a market that is often digital-first.

Make the strategic investment and operational choices to capitalize on new digital entrants.
Make the strategic investment and operational choices to capitalize on new digital entrants.

The Future Customer

Customers tend to like digital disruptors; they’re edgy, creative, and valuable. Most fintech companies address specific customer pain points and ambitions. Commerce platforms increasingly deliver lifestyle experiences that place them in the day-to-day world of your customers. How do you get into the hearts and minds of existing and future customers? What are the motivations and attitudes of your potential customers? What expectations will be placed on you based on the last best experience customers had in any market? This is the moment to ramp up your knowledge of existing and future customers — and use those insights to gain strategic value.

Digital Banking

Banking is already a digital market, but it sits in the early stage of a new round of technology infusion led by AI, RPA, and blockchain. This is not a story of arming yourself with technology; this is a story of using technology strategically in service of the customer — using technology to help break out of product and delivery silos and overcome organizational inertia. Fintech and commerce platforms were born digital — you will need a clear and bold technology road map to overwhelm the status quo and win in today’s digital banking world.

Scenario Planning

Banks need scenario planning for a clear-eyed view of what 2020 and 2021 will look like and act like. How will startups progress, and who will survive or thrive? What is the real ambition of commerce platforms, and where do future strengths and weaknesses lie? What is the future of payments, and how do banks position if payments simply melt into the background of commerce experiences? Scenario planning gives you clarity and time on the clock — time to identify strategic options so you can best position for a bumpy, dynamic ride.

Strategic Decisions

With all of these dynamics swirling, the question is what do you do? Castle and moat strategies won’t work. Instead, you will be tested to adapt and innovate in ways that are fundamentally different and new. Will you buy? Partner? Form innovation teams and try to build organically? There is no reason why traditional banks can’t out-think, out-innovate, and out-execute others — but that will require you to make new and bold decisions that can change the nature and fate of your firm.

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