Why Digital Banking Ecosystem is must for Banks.

Customer expectations and usage patterns for banking products and services have greatly shifted. Banks are realizing that they need to move beyond providing deposit, payments, and loan services, and reinvent themselves to assist customers by giving them personalized services depending on the specific needs, like help in buying homes and cars, sending money to family and friends, managing monthly finances, make more informed investment decisions, buy products from online or retail stores with complete ease. Digital technologies are helping consumers do all of this and even more. Banks now have the potential to create an ecosystem of value-add services that constitutes the “Everyday Banking”.

However, Startups and social media/ internet platforms are expected to be the top FinTech disruptors in the financial services sector, with consumer banking, funds transfer and payments their top three priorities. The key challenges to the sector from FinTechs are expected to come from aggressive price competition, loss of market share and threats to information security and privacy.

If customers turn to the new FinTech players instead, traditional banks will lose direct connect with their customers. While these startups do offer customers unique services, they don’t yet have that deep understanding of their customers and customer loyalty is still in the process of developing.

I understand that a transformation to digital banking is a strategic undertaking. Transforming legacy systems for the new era is too much for any financial institution to attempt on their own.

But there are partners available to help who can assist financial institutions build a digital ecosystem and help manage that ecosystem and create an integrated digital banking solution.

Banks have the customers. Banks own the data. Banks have the insight needed to create the personalized offerings that customers are expecting. Banks have a head start – but the FinTech players will quickly catch up.

Bank should grab the opportunity they still have today and immediately start working on an open banking strategy before it’s too late. If they don’t, they may find themselves supporting rather that being a key player in the open banking era.

What are the challenges and opportunities for Financial Institutions in adapting to Digital Strategy? Where is the industry heading? Let us know your thoughts in the comments section below.