Most humans do not willingly embrace change. We like processes and products that are consistent, and the same can be said of the institutions that were created and maintained by humans, especially those that are designed in part to be less subject to the daily shifts in public opinion. For the sake of this discussion, we’re looking at Financial Institutions. They are founded on the idea of solidity and permanence. So, when a new regulation appears to effectually create a time of reshuffling the order of things and change the rules of the game, FIs must take a fresh look at the role they play in consumers’ lives.
These effects will be heightened among millennials, but bankers expect everyone to respond to new services that will help consumers spend wisely, manage their money better, and more conveniently use day-to-day banking services. Almost all (90%) of those bankers surveyed believed that millennials would be using banking services from a variety of providers that are accessed through a single aggregation portal, impacting the important relationships banks hold with their customers.
Mercator Advisory Group concurs in the assessment of Financial Institutions will need to demonstrate additional value to consumers in terms of personalized advice and easy access to tools to help modify their own financial behaviors. We expect the FIs that balance a focus on their core functionality with the construction of a varied network of those apps and integrated services that empower their clients will be the early winners in the transition to open banking across regional economies. Our forthcoming report, Banking as A Platform from the Customer Interaction Advisory Service delves further into the anticipated impact to financial industry participants of the movement to open banking and the various strategies FIs and their vendors are employing.
Overview by Joseph Walent, Associate Director, Customer Interactions Advisory Service at Mercator Advisory Group
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