In response to evolving consumer expectations and rising competitive pressures, the banking industry is undergoing multibillion-dollar digitization transformation. These initiatives are focused on fundamentally changing the entire banking technology stack, including reimagining the business with a customer-centric approach. With traditional banks increasingly relying on technology, financial technology (fintech) services adoption is also experiencing rapid growth. Fintechs raised $33.9 billion in venture capital in 2019 alone. In Europe, new entrants in the banking industry such as digital-first banks, non-bank payment institutions and big technology companies have captured one-third of all new revenue since 2005, jeopardizing the competitiveness of traditional banks.
Underlying this transformative change is a disaggregated value chain that cuts across businesses and industries, leading to increasing interdependencies on a model that relies on networks and the power of many. Through collaboration with external partners such as fintechs, advisors, third-party developers and other technology partners, banks are joining the value chains of different industries to create ecosystems. The goals include a reduced cost to serve, improved efficiency and reduced friction, thus providing customers with new experiences and stimulating their desire for more. If implemented correctly, a banking ecosystem is able to create a customer-centric, unified value proposition that expands beyond what customers could previously get.
Read the ISG paper Embracing a Banking Ecosystem to Transform and Innovate to learn more about the factors that impact the banking industry and how banks can leverage ecosystem partnerships to survive in this constantly changing competitive environment.
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About the authors
Owen Wheatley
What he does at ISG
To say Owen Wheatley comes prepared to work through your operational concerns and transformational needs is an understatement. As ISG’s Lead Partner of Banking and Financial Services, he treats his 25+ years of experience in this ever-evolving, customer-centric field as a replete lexicon of applicable knowledge, relevant learnings and potentially executable solutions. In doing so, he makes the ethereal and theoretical, actual and obtainable.
Past achievements for clients
Knowledge-sharing is second nature to Owen. He provides his clients with market insights and meaningful thought leadership and helps them understand what similar (or different) organizations in comparable situations have done regarding transformational change. Many of Owen’s clients have sought his expertise to strengthen their customer engagement on the digital front, enhance the employee experience to improve the customer one and navigate new ecosystems—like integrating emerging partnerships—endemic to the industry. He makes sure that untangling this complexity and harnessing your new relationships always lead to your number one goal: driving better results for your banking or financial institution. In fact, Owen:
- Led a consulting team to design a commercially groundbreaking and elaborate deal for one of the largest hedge funds in the world to reimagine its middle and back-office operations, lessen the bureaucratic demand on the front office and serve institutional clients better. The measures of success for this co-designed and collaborative project included defined stages of excellence and experience metrics, delivered in a commercial model which positions all parties for success.
- Managed a large team of advisors to provide market insight and an "outside-in" perspective to multiple major North American banks looking to transform their operations, including indirect auto lending, core banking, cheque processing and the entire cash ecosystem.
- Led a team of experts in helping to transform the HR technology and operations of a major European bank, including designing the right strategy, creating the roadmap and business case, selecting the right partners for a new ecosystem and ensuring expedited and effective implementation.
Sagnik Biswas
Paul Reynolds
Paul Reynolds leads Momentum, a division of ISG that provides research services to help service providers better target, win and retain business. Paul has 25 years of market research experience with specific expertise in methodology development, data analytics and research process design. Having found many service providers’ Advisor Relations functions to lack appropriate analytics, Paul is working to develop innovative new approaches that allow for data-driven programs based on the unique needs of each client. His approach benefits Advisor Relations, go-to-market functions, sales, strategy, marketing, and market/competitive intelligence teams.
