How to profit from the open banking ecosystem?
A significant shift is happening in retail banking, driven by fintechs and changing customer expectations. Retail financial institutions are adapting their operating models through collaboration and embedded finance.
Retail banking is rapidly moving from a traditional model to something far more flexible. Until relatively recently, banks believed they needed to own both the development and distribution of their products, as well as the customer experience.
While some products fell outside that model, it was the general operating model - and some institutions still take this approach. However, rapid changes have provided banks with a range of options in terms of how to create and source products, as well as how they are distributed and serviced. Marwan Abouzeid, Principal Solutions Consultant at Finastra, says this means that many banks are no longer operating in silos.
There are a few different directions that banks can take, either focusing on sourcing products, data or components from third parties or through forming partnerships to distribute their own products and services.
Regardless of the approach taken, the big question remains. How do banks and fintechs ensure that their long-term product and distribution strategy enables them to profit from this open ecosystem, today and into the future?
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