Cap Gemini released their annual Fintech Report last week, and in this post i capture the key themes and share the pretty cool infographic. The title, BigTechs and Challenger Banks are here to stay – Can incumbent banks still thrive, is pretty intriguing. Intriguing because the title alone establishes:
- BigTech is here (in the financial services sector)
- Challenger Banks are here
- Incumbent banks will survive, but can they thrive?
Check out my recap of the World Fintech Report 2019 – Preparing for Open X. You probably guessed it, this year Cap Gemini talk about embracing Open X. See the World Fintech Report 2020 for full details of this years instalment – in the meantime, following is a quick recap:
World Fintech Report 2020 – 4 Key Themes:
Big Tech and Challenger Banks Strengths:
- Digital – operating on an open platform model that integrates with other platforms and apps
- Data driven – allowing customer focused products and services by leveraging the available data
- Agile – scalable technology and cultures that allow products to be launched quickly
- Customer focused – with simple solutions, lower cost products and services, and a faster service
Incumbent Banks need to embrace Open X:
- Open X moves traditional banks beyond compliance for the sake of compliance, nicely explained by Cap Gemini by the following equation:
- Seamless eXchange of data and resources + eXpedited product innovation = Improved customer eXperience
Succeeding in an Open X world requires traditional banks to:
- Transform themselves into Inventive Banks by being:
- Customer focused
- Collaborative
- Agile
- Recognising their strengths in one of the following areas:
- Suppliers
- Aggregator
- Orchestrator
- Strengthen their mid- and back-end operations by partnering with mature fintechs in a 3 step process:
- Identify – by creating the end to end customer journey
- Prioritise – identify the mid- and back-end processes that will have the biggest impact on operational efficiency and Customer Experience
- Collaborate – with Fintechs
Open X demands Collaboration between Inventive Banks and Fintechs across 4 key areas:
- People – a dedicated collaboration team
- Finance – fail-fast mindset to innovation so any dead ends are quickly avoided
- Business – scalable partnerships with trusted providers
- Technology – reduce the dependency on legacy systems
