The Composite Bank

the composite bank

Although we hear a lot about robots replacing jobs, most businesses are already well down the path of automation. Moving forward, businesses will continue to leverage advances in automation technology. However, the new frontier of competitiveness has shifted to product and service innovation. Success on this front goes to those able to create customer experiences that deliver insight and convenience. These experiences are created by understanding the lifestyle needs of mobile consumers, and strategically inserting services that satisfy these needs along the consumer’s path.

Ecosystem thinking

Banking is an industry that is exploring this new frontier. 5 years ago Omni-channel banking was all the rage – How do we co-ordinate our branch and mobile assets to maximize customer service? Omni-channel has since expanded to encompass ecosystem thinking. In ecosystem thinking a bank recognizes that financial transactions are a component of a larger lifestyle need. A customer doesn’t want a mortgage, they want a house. Rather than focusing on optimizing the mortgage processes, bankers ask themselves – How can I insert my mortgage services into the house purchase process to increase my share of the mortgage market?

Much as banks might like to provide experiences for customers engaged in the house search process, regulatory hurdles often limit vertical integration opportunities. As a consequence, the role of northern partners is important. At this pole Fintechs, and other nimble players, uninhibited by regulatory and legacy baggage, are able to innovate more effectively than banks. Combine this innovation with a traditional banks access to capital, customers, and regulatory expertise and the potential exists to deliver compelling customer experiences.

Lead or follow?

Once a banker is bought into ecosystem thinking, a number of key questions arise – Which ecosystems should I participate in? Am I a driver or a participant?  Can I own the customer? It’s worth noting that in ecosystem thinking, a requirement to own the customer can be limiting.  What is ultimately important, is to own, or have an option on, the profit point in the ecosystem. Being flexible on this front allow banks to begin the experimentation required to identify the winning plays and players, and to acquire, and scale, this capability either through imitation or acquisition.

Enter the Mule

Many customers ask what ecosystem services they should provide? The answer to this question can be found by picking up a mobile phone and walking a mile in the customer’s shoes. Then, to bring these services to market, there is a need for a technology platform that delivers the micro-services and APIs that facilitate the information flows between partners in the ecosystem. This includes managing the associated aspects of security and change management.

Developing these capabilities are part of becoming what we call the composite enterprise.


 


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