The financial services sector has witnessed immense change over the last several years, caused by a combination of new regulation, increased competition from new market entrants and the consumer’s changing needs.

Our research found that 37% of financial services professionals believe that customer demands will drive the most significant change over the next few years. This has made me start to think about this change and how financial institutions can create an expanded ecosystem to provide the best possible experience for the consumer.

This idea was inspired by our members at the Shanghai Pudong Development Bank (SPD Bank) in a webinar they hosted in November. They shared a concept called the ‘Panoramic Banking Strategy’.

Panoramic Banking Strategy is the idea that banks can build a platform-based ecosystem around the needs of the customer life cycle and production cycle. This ecosystem would share information around the brand, channel, customer, technology and other resources with business partners. This approach would require the intelligent use of data to determine customer requirements, allowing the bank and its partners to provide the customer with financial and non-financial products and services aligned with their needs.

Going beyond Open Banking

This approach gives a new and much broader meaning to ‘Open Banking’ and empowers the industry to go above and beyond when it comes to their relationship with the consumer. Additionally, this approach will provide banks with an opportunity to increase revenue, with numbers dwindling since the beginning of the pandemic.

Open banking as we experience it today is a free interchange of data between banks, consumers and aggregators to make life easier for the consumer, while still focusing on financial transactions. Today, the customer requires to do less, get more, and spend less but gain more!

In SPD’s vision, Open Banking includes a wider range of service for their customers outside but related to financial services. For example, the consumer could experience a seamless travel experience, orchestrated entirely by the bank. For example, the customer could book their travel through the bank. The bank could then identify the correct currency and exchange rate for the customer based on their travel location, help the consumer budget for while they're away, and then reverse the exchange rate once they return home.

Reaching for the Opportunity

A good orchestrator would provide these services at scale across its entire network at a low cost to make it worth the consumers while. Open banking has already shown banks can act as the preferred orchestrator (trusted party) in many scenarios. The bank may even be better than social media (Facebook), eCommerce (Amazon) and search engine (Google) in their special domain or scenario. This will be particularly important as banks start to consider the likes of these organisations entering the financial services market.

The Future looks Bright

As we enter 2021, I strongly believe that banks should look to broaden their horizons and consider the services they can provide the consumer. The examples provided by SPD Bank should provide us with inspiration as to what this looks like and help us ride the wave of change for years to come.