But the need for innovation creates some serious challenges for financial institutes, due to the security and integrity standards they must oblige by, while at the same time keeping up with the speed and agility of the fintech competitors.
Daniel Burrus, one of the World's Leading Futurists on Global Trends and Innovation, says: "One trend to watch very carefully is the speed of change that new financial technology start-ups, often referred to as “fintech,” will bring to the finance industry". Read article here
But the challenges don't end there.
Ross Mason, founder of Mulesoft is convinced that fintechs are not the main source of worry. “Contrary to popular belief, I don’t think fintech startups are the largest threat to banks today. Fintech startups build for the consumer, and banks have traditionally built within their limitations. As a result, the biggest threats to banks are disconnected technologies and archaic operating models that are incapable of evolving with consumer expectations”. Read article here.
But how can traditional financial organisations keep up with fintech companies?
Bankings is moving from a commodity to an ecosystem and in order to keep up with these new opportunities and challenges and to support the new business architecture, banks have to scale beyond the norm. This means new business models, new governance and new partners.
One way to address the latest technological challenges while adhering to the standards, is by leveraging an API-driven business model.
This will de facto change a financial institutions business model to the core, and yes, this can be scary. But the opportunities are not only abundant, an API-approach may constitute the whole difference between survival or extinction.
If you can't beat them, join them
If a bank would open up their products into a set of services accessible, fintechs with specialized skills, can gain controlled access to data and capabilities through API's. In this way a symbiotic relationship is created between financial institutions and fintechs which can help reach new target groups and demographics.
7 success factors for digital transformation as seen by A.T Kearney analysis:
- External client centricity - customer experience in focus
- External open innovation - open innovation eco system
- External fexibility - long-term vision and short-term execution
- Internal open innovation - inclusive digital teams
- Internal organizational flexibility - agile IT platform
- Internal client centricity - new roles for branches
- Inclusive digital culture
- Solutions & services - Integration & API, Agile IT Operations, digital workplace, automation, cloud
- Videos, white papers & guides - Connect the world, How to build a high performance IT team, API Ready E-book,Will banks clam up and go extinct – or embrace DevOps models required to survive the digital transformation
Information from partners:
What banks can learn from Fintech Startups (MuleSoft)
Also glance at:
Make the organizations internal and external information available in order to increase transparence, beneficence and speed of interaction internally, with customers and other organizations. This must happen within an ecosystem that is capable of delivering IT solutions in an ever increasing speed.
This survey covers the digitalisation in the Nordics. It shows the need for making businesses more efficient, and singles out that aspect as the most important driver for digitalisation, followed by the need to automate processes. More interesting findings in the report.
Disruptive forces are profoundly changing the insurance industry. A unique combination of challenging market conditions, shifting customer behaviors and new digital-first market entrants threatens long-established and profitable business models.