What could a bank possibly offer that a FinTech cannot? At first, this was a rhetorical question. The FinTechs asked it with a grin, and the banks with a frown. The upstarts were innovating rapidly, engineering more addictive experiences, and delighting customers with rapid response times. The banks, after initially pooh-poohing them, launched a vain effort to match them in their agility. The FinTechs looked poised to take over the financial world and the banks were all but labelled redundant. And then, almost as quickly as the rise of the FinTechs, sense prevailed and the original question – What could a bank possibly offer that a FinTech cannot? – ceased to be redundant.
The entire prologue took place over a dramatically short period – no more than eight years, the aftermath of the 2008 crash. Not only did it raise harsh questions about the relevance of the banking industry, it also saw the ecosystem spend billions in ill-thought-through technological leaps of faith. The rampant innovation that characterised the Digital Era was never more visible than in these years of banks’ identity crisis.
Three factors have led to a re-evaluation of the rise of FinTechs and the relevance of banks.
In the interest of the customer, banks have begun to relinquish their hold over niche lines of business to FinTechs (either their own or as partners), and FinTechs are looking to banks to support them in growing their customer base, scaling operations, and navigating compliance. Banks have begun to approach even departmental digitisation within its ambit, from a more holistic perspective
On this very interesting, collaborative landscape, a new proposition has emerged – unmatched in scope and unbeatable in value. A shift from the scramble of one-upmanship and hyper-verticalization, to a quest for harmonious integration.
This is Digital Banking as it should be!
The 5E Proposition
The 5E proposition moves away from the confines of a product to focusing on the end-to-end experience of the customer, tapping into the data reserves of a bank while achieving the sort of personalisation and agility only believed of a FinTech.
Most interestingly, the 5E proposition is a truly Digital proposition. Customer experience on the outside, and operational efficiency on the inside. We call this Digital 360.
In the next blog, we explore how the 5E Proposition is more than a sum of parts, how it can be baked into the very architecture of your banking system.
In a career spanning over 25 years, Prasanna R has been a hands-on technology expert, engineering leader and strategic architect for very complex and large mission-critical transformational programs. He came into the Intellect fold two years ago from CSS Corp, where he was the head of product life cycle services.