The future of banks depends on the development of FinTech sphere. The main topic about it is the arrival of the PSD2 and open banking in Europe. Ben Robinson, Chief Strategy Officer of Temenos, described his vision of the final state of banks and identified two main functions:
- Services based on infrastructure: Supplying that gives an opportunity of secure, reliable and fast transactions. The function is based on savings from investments in existing systems. They support the competitive position and substantial market share. This will compel consolidation within the European market until only a few large players exist.
- Aggregators of financial services: Digital channels playing a role of a marketplace between customers who are looking for solutions and products providers trying to spread their products. Most customers attract the size, quality of the network, as well as the reputation of the supplier. Negotiating for the best offers is important to help clients choose the most appropriate solution.
Also it is possible to allocate one more significant function:
- Financial solution provider: Such financial decisions as security of mobile payments, personal loans and investments. The importance of product based on the customer's rate, terms and service. Ultimately, financial products are even more like commodities will have fewer differences in products and lower margins. The role of suppliers in simple factories will be limited as here the effectiveness becomes more important.
Full-featured providers would offer a solution covering all three roles or propose more opportunities.
Financial institutions suggest different options to better position themselves for this prospective future. First of all, companies should analyze their competitive advantages and unique qualities. It will help them to identify their future direction. Once this is done, the company needs to work on the final outcome. Such actions may entail mergers and acquisitions to scale up or complement the current package of activities or they will allow to concentrate on a concrete kind of activity.
At the moment the future is not defined and depends on many factors. For companies, this means that there can be no concrete scenario. The best solution will be to support certain capabilities that can be applied to different roles. Digital transformation adapts the structure that will allow you to quickly respond to a changing environment. At the same time, the company must remain competitive for one simple reason. Change in the future can take any time interval and it is impossible to guess in which way it will change.
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