Bank Modernization Crucial to Financial Services Industry

Written by IhebQld

This article at Fintech Futures is a warning to banks not to let themselves get outdated. We have written much on the topic of bank modernization and how critical it is to the FS industry. The author is this case is a proponent of banks establishing partnerships as the primary means to this end.  The author is also a senior at a fintech specializing in cross-border payment transactions.

‘Partnerships are not a new feature of the industry – and we are seeing more of them emerge every single day. Just recently, Santander announced a partnership with SAP Spain to support digitisation and enhance the onboarding process for new clients, while Morocco’s Attijariwafa Bank launched a partnership with Thunes to power their cross-border payments….To understand the importance of partnerships, it helps to understand the challenges banks face: a growing number of threats and competitors, a customer base that is becoming more open to new providers and a stretched pool of resources to respond to these issues.’’

If you had been at a banking industry event 5+ years ago you may have had a majority of attendees who thought fintechs were the enemy but that has shifted to the point where cloud and BaaS/SaaS technology is being adopted by banks at relatively fast pace for the traditionally slow moving financial services industry.  In effect, banks have always used technology partners for various systems delivery, but the newly minted and fast-paced fintech sector that directly targets bank clients (more so on the consumer side than corporate clients, at least to date) is something that wasn’t a traditional threat.  However, there is a recognition (on both sides) that fintechs can help banks and vice versa, so more partnerships than ever before are occurring to help with bank modernization.

‘Through something as simple as an API integration, banks can offer new products that make customers’ lives easier and keep them engaged and excited to use their services again. And integrations are not simply added value for customers – the time and money they save also converts into added value for a bank’s business, too….Partnerships are a proven solution that allow banks to successfully navigate growth and overcome barriers to innovation. Those that take advantage of partnerships now will retain and grow their customer base and ensure their longevity in an increasingly competitive market. Those that delay action risk ending up like a head of M&S broccoli that spent one day too long in the fridge – you can still use it, but you’ll know that it’s a little past its true potential.’

Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group.

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