Consumers today expect convenience, personalization and choice from their financial service providers. As a result, financial institutions are under increased pressure to evolve and keep up with changing customer expectations.
World Fintech Report 2020 from Capgemini and EFMA revealed that 50% of consumers now say their financial services provider doesn’t deliver a personalized experience, while 48% of new-age consumers were frustrated by a narrow range of products and services.
In this scenario, the strongest option for financial institutions is to turn to the challengers driving change in the industry, the fintechs. A growing financial ecosystem now offers the chance to match specific solutions to consumer pain points via an app-based
collaboration, delivering change fast, while keeping financial institutions in control.
Digital transformation traditionally relied on a total replacement of core systems – a risky and costly endeavor. However, APIs now enable what Deloitte refers to as ‘microservices-based
architecture... providing access to and from other internal and external services’, augmenting the core system with new solutions.
Fintechs are going beyond traditional financial services to create marketplaces of specific services that add value to client relationships, internal processes and product development. By matching the right service to a problem or goal, financial institutions
can quickly find solutions to pressing business challenges, accelerating progress and driving change while at the same time mitigating transformation risk and resource drain.
A strategic approach to partnership
While each financial institution has unique needs, app marketplaces offer a high degree of flexibility and a variety of options to choose from. Financial institutions may even find that there are multiple app options for augmenting their offerings. In this
instance it can be helpful to work with an approved finance app marketplace that pre-vets solutions and developers which can help significantly save on implementation time, cost and risk.
Finding the right partner
The World Fintech Report 2020 identifies a three stage-process for selecting and implementing app solutions:
- Identify opportunities by creating an end-to-end consumer journey map that shows all potential optimization opportunities.
- Analyze performance at each stage of the consumer lifecycle against competitor service offerings to prioritize mid and back-end processes that have maximum impact on operational efficiency and consumer experience.
- Collaborate with fintechs to digitize workflow elements and experiences, improving performance.
By approaching app selection in a targeted way, financial institutions can deploy specific solutions at each stage of the consumer journey in order to steadily keep up with the rapidly changing and evolving consumer expectations.
Marketplaces in action
Financial app marketplaces can enable financial institutions to connect to a wide array of innovative fintech offerings designed to solve their most pressing challenges- allowing them to browse for, and select, the app that solves their business need, and
leverage the out-of-the-box pre-integration in order to quickly realize the value of the app.
Those marketplaces use independent experts to pre vet all fintechs and applications for quality and relevance, helping financial institutions make safe and reliable choices, faster.
The open financial future
As digital becomes the standard means of finance engagement, financial institutions will need to offer consistent, seamless experiences across their product suite. Apps help financial institutions close specific gaps in their digital solution offerings and
upgrade the most pressing technical issues without instigating an end-to-end review of core infrastructure.
Financial institutions and fintechs will both play a key role in the next stage of financial services innovation, but this requires both sides to see suitable ROI from their partnerships. By working on specific challenges, fintechs can maximize value added
for their financial services partners, while financial institutions offer access to a wider addressable market. With increased focus and clarity both partners benefit, and more importantly this ultimately benefits the end consumer.