In the past, we were witnessing partnerships between traditional banks and FinTech, where FinTech companies were "hands" under the financial hood. This Partnerships recently has changed for the better? Who owns the lead?
Why the situation has changed? Let's have a look at the form and shape of the modern strategy process to formulate a New Normal.
In the past customers were visiting their traditional bank branches to accommodate their needs in payments, transfers, cheque or cash deposits, but with the "New Normal" of Covid-19 restrictions and beyond the rapid demand for the online services and payments ( more, than 70% of all transactions and payments currently is done via mobile platforms and applications) pushed the development of FinTech in all spheres and industries of our life. Online banking applications is the third in popularity after "Social Networks" and "Weather". All this started a way back in 2011 - 2015, when Data Science, AI ( Artificial Intelligence ), and ANN ( Artificial Neural Networks) started to take over the human decision-making process and delivered "human alike capabilities" and augmented workforce.
The rise of AI, ANN, and ML ( Machine Learning) brought a new "spicy" approach in the "human alike " decisions making process, following the lead of cutting the costs and maximizing the revenue with harnessing and pioneering real-time online payments with virtual cards and utilizing digital branches. All this started with an alternative approach to fiat currencies. The rise of Blockchain and Trinity - of scale solutions showing us the way for the next 100 years to come.
All the above increased the demand to change the approach for development. With a "New Normal" - FinTech companies started using best Kano models and an Agile approach in their projects. Banks that was previously obsessed with FinTech partnerships lose their interest and grip and moved to "back positions", as a fuel to the project, neither then the crown of it...
According to Louise Beaumont: "For banks, partnerships won’t generate the quantum leap they need to move beyond a product-centric mentality to deliver next-generation services. At best, they may gain a workable solution that squats awkwardly in the existing infrastructure. At worst, they’ll fail to deliver any noticeable difference.”
Whats next?
There are several ways to collaborate for the mutual benefit between FinTech and Financial Institutions. One of which will be the banks will be the "fuel" for the "service", that FinTech will generate and second reinventing a new digital banking ecosystem and this is another topic for discussion.
Let us know your thoughts.
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