The fear for many FIs with regards to the rise of fintech and fragmentation of the banking business model is the prospect of being reduced to “dumb pipes” through which transactions flow. The author does well in uncovering the real opportunity FIs may realize if they shift their view saying:
Banks everywhere stand to gain more than they stand to lose by opening up their data to outside partners. In order to hold on to customers, banks need to stay nimble and innovative and forge stronger connections between consumers and merchants across not only payments and rewards, but also other financial and non-financial products and services.
By realizing the need many consumer have now for a trusted advisor and partner in negotiating the increasingly complex financial interactions and finance-enabled experiences that our modern world offers, FIs would move easily into this role with tools and solutions to optimize the realization of individual consumers’ goals. However, it will require courage to dispense with the traditional and comfortable of business model that has worked for so long, but has really been consigned to a diminished role. Reinvention has been apparent in many industries as data becomes the prized commodity. FIs, large and small, are fast approaching a decision point.
Overview by Joseph Walent, Associate Director, Customer Interactions Advisory Service at Mercator Advisory Group
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