The proliferation of digital technology and changing customer expectations have altered the landscape for financial institutions, particularly incumbents.
Leading companies such as Accenture identify the 'customer-facing ecosystem' as a method of meeting these challenges.
These ecosystems, says Accenture, multiply customer interactions and change them into hyper-relevant and personalised experiences.
The global consulting firm says that "banks that offer these integrated, contextualised experiences go beyond traditional financial needs and meet broader customer needs. They support their customers, becoming hyper relevant in their customer’s everyday life."
Banks can create value in these ecosystems in several ways. These include the expansion of primary relationships by broadening the scope of interaction with customers.
Similarly, such an ecosystem allows banks to open their infrastructure and offer ecosystem partners access to their customer base an data in exchange for fees.
Lastly, the delivery of more personalised and customer-centric experiences will reduce customer churn.
Within the banking industry, Accenture identifies five different options for organisations to develop and launch an ecosystem.
With this type of ecosystem, banks can orchestrate ecosystems around specific life moments, offering partners access to their customer base in exchange for fees.
This type of ecosystem allows banks to operate as a marketplace orchestrator through white labelling or co-branding. Marketplace orchestrators sell non-financial products to customers.
A third party ecosystem is where banks can join a third-party platform to offer banking products to third-party customers.
Open banking platforms allow partners of banks to incorporate products, data or specific processes in their value proposition. With this ecosystem partners can leverage open application programming interfaces (APIs).
This banking ecosystem directs rejected customers to other providers, such as a large bank sending a small business to a designated online finance platform. However this ecosystem is not hosted on a third party platform.
For more information on all topics for FinTech, please take a look at the latest edition of FinTech magazine.
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