#Standard #Chartered, headquartered in London, is expanding its global digital footprint from Hong Kong to the west coast of Africa. The bank, which has $ 663.5 billion in assets and operates mainly in Asia, Africa, and the Middle East, announced in June that it would begin work on developing a disruptive new business model for the Hong […]
Bank Innovation
#Consumers want #banks to do more than just hold #their money. They want their banks to help them meet their financial goals. In fact, a new consumer report by CSI shows that 83% of American consumers agree with that statement. That number jumped to 87% for consumers with an annual household income of $ 100,000 or […]
Bank Innovation
When an insect searching for food triggers a Venus flytrap, the carnivorous plant reacts within half a second to capture it. It doesn’t have to get ready for that interaction—it’s always ready. #Banks need to have the same type of rapid reaction when it comes to partnership opportunities if they are going to thrive in the complex ecosystem of #Open #Banking.
In my last blog, I discussed how traditional banks will likely evolve into various open platform business models to ensure future growth. New entrants like banqUP, Revolut and Starling are already attracting consumers to the concept of marketplace banking—and there are indications that many incumbent banks are getting ready to follow suit. This approach wraps the best money-related apps, products and services from third parties around a robust and well-branded core financial services product (such as a current account or payments) to deliver a richer customer experience and create powerful network effects. Incumbent banks are starting to adopt this model to grow their businesses, making their APIs available to outsiders. These include Barclays, BBVA, RBS, Citi, Santander, Capital One, DBS #Bank, Goldman Sachs and others. While our recent research shows that only one percent of banking revenue in the US is being generated by open platforms, it has the potential to rapidly mutate into a Red Piranha flytrap that takes bites out of incumbents’ revenue.
We found that global card services and global financial institutions offer the most advanced and differentiated capabilities across these three dimensions. Banks in southern Europe are differentiated by their platform usability and ecosystem engagement abilities; this explains the relatively higher maturity of developers in these regions. Western European banks seem more focused on exposing APIs that deliver value-added services. Leading digital banks, such as BBVA, which have already made APIs available beyond those mandated by regulations, are presenting various approaches for usage and pricing—a key indicator of developer-portal maturity. Although the developer ecosystems of global banks and card services are clearly ahead of other financial institutions, our research shows that southern European and Nordic banks are rapidly catching up.
Despite the emergence of more aggressive approaches, the majority of incumbent European banks are only offering those APIs required to comply with PSD2 regulations, and very few are moving into value-add APIs. Fintechs and challenger banks, on the other hand, are working to offer a broad range of APIs and look more like non-financial services platforms, such as Amazon, which offer upwards of 100 APIs for third-party consumption. Also, card services like Visa and Mastercard now offer at least 25 API products that enable a range of services from accessing core business services to advanced data insights.
Platform banking is still in its infancy, yet we expect to see an explosion of Open Banking APIs from financial institutions in the years ahead.
I invite you to read more about our research and banks’ relative open platform maturity in our report, Competing in the new era: Find value in Open Banking ecosystems
The post Cultivate your bank to compete in Open Banking ecosystems appeared first on Accenture Banking Blog.
Citi Ventures‘s recent investment in Anaconda, an Austin, Texas-based AI and machine learning (ML) software company, shows the industry’s commitment to staying at the forefront of this growing and developing field. AI has certainly generated a lot of chatter and buzz in the financial world, but #banks are still challenged to implement it properly. Citi […]
Bank Innovation
In the post-financial crisis era, European #banks have sought new avenues for profitable growth. There has been an emphasis on finding ways to grow without taking on the types of trading and financing risk that got so many banks in trouble in 2007 and 2008.
Private banking (or #wealth #management) seems like an attractive area of growth for many banks. The Allianz Global Wealth Report for 2017 points out that the financial assets of households in Western Europe grew by 4.7 percent to a total of EUR 35.3 trillion during 2016, the latest year for which such numbers are available.
The private banking market, however, presents banks with significant barriers to entry. Private banking relationships are “sticky” and are often built on long-term, multi-generational interaction, along with considerations such as reputation and brand image. New entrants may find it hard to take share from established competitors.
But, increasingly, private banking clients have the same concerns as other bank customers do. They travel frequently, are short of time, and have become accustomed to using digital financial services. We noted in a recent report that, among High Net Worth (HNW) and Ultra-High Net Worth (UHNW) customers, 70 percent use digital financial services and 85 percent use at least three mobile devices. More than 40 percent said they were open to using mobile #technology to check their portfolios and receive investment-related information.
Digital solutions—including well-designed mobile apps—can help banks “take the office to the client.” For example, banks using digital solutions can see where clients hold other accounts, or they can readily check whether the client uses other bank services such as business accounts or foreign exchange.
Such solutions will not replace the private banker but can help private bankers build relationships and expand service offerings. More importantly, such solutions have become essential to the kind of hybrid advice and digital wealth management that clients are now seeking.
The wealth management market is both dynamic and competitive. Traditional banks are fighting for share with new entrants using digitally disruptive technologies. In our view, private banks combining investment expertise with new digital and mobile approaches will be well-positioned, not only to keep existing clients but to add new clients who want both connectivity and personalized advice.
In my next post I will look at some of the features of a first-class mobile app for wealth management.
The post Going digital—and mobile—in wealth management appeared first on Accenture Banking Blog.
In some markets, #banks and fintechs are a long way from overcoming the dependence on cash. This challenge is felt at #Germany’s Commerzbank. As one of the country’s top five banks, with €452.5 billion ($ 513 billion) in assets, and boasting a 50-person #innovation lab, implementing #fintech for a fiat-focused market has its challenges. “What is striking […]
Bank Innovation
Bank Innovation has learned that Crédit #Agricole, a €1.76 trillion ($ 2.01 trillion) bank headquartered in France, has achieved 70% digitization of its service offerings among its worldwide network of #banks throughout Europe and North Africa. A spokesperson at the bank said the financial institution network hopes to achieve 100% digitization of its services by the […]
Bank Innovation
Large #banks, e-commerce moguls like Amazon and eBay and tech firms are likely to enter the #alternative #lending space, and soon, according to Eden Amirav, co-founder, and CEO of startup LendingExpress. In markets like Australia, this is already happening. National Australia Bank set up its own alternative lending arm called QuickBiz Loans back in 2016. Over the […]
Bank Innovation
While Europe continues to advance its #Open #Banking transformation triggered by the PSD2 and CMA Open Banking regulation, other countries are observing it carefully and planning their own agendas.
In #Asia #Pacific, the approach to Open Banking is being driven at a country level and is somewhat fragmented for now. There is no single body of legislation as there is with PSD2 across Europe.
With Open Banking, banks should be considering strategies to both attack and defend.
Traditionally, banks have been very well vertically integrated, covering all aspects of the value chain—from origination to servicing to risk and balance sheet management. But in the last few years, non-bank fintechs and tech giants have started to disrupt this value chain. Asia Pacific has a huge population of untapped, unbanked millennials who are ready to embrace new technologies and services, making it a very attractive market for these disruptors.
With Open Banking, banks should be considering strategies to both attack and defend. New digital offerings that are hard to copy and/or can be launched and scaled at speed can unlock new value pools. Yolt in the United Kingdom is a good example of this. In Australia, an Open API integration between NAB and Xero is helping NAB defend its SME business: It enables new service propositions such as cloud-based bookkeeping for their SME customers, including instant online approval for business loans.
The next battleground for banks in an Open Banking world will be with industry ecosystems. There will be a range of opportunities for banks to partner with other corporates to create new value propositions. These will span a range of industries including telecommunications, energy, transport, retail and leisure, and will target customer journeys in completely new ways.
The post Asia Pacific Joins the Open Banking Revolution appeared first on Accenture Banking Blog.
You’re probably aware that the way we bank has evolved dramatically over the last few years, but that banking business models have been slow to keep pace. Combined with the general lack of trust in our banking institutions, the industry is poised for massive disruption. Failure to keep pace with changing consumer preferences has opened […]
Bank Innovation
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