Collaboration is the shape of the future (Part 1)

Today’s customers are changing the way they access products and services.

Collaboration is the shape of the future (Part 1)

It is happening across a range of industries and activities – from taxis and shopping to HR and workflow. Customer appetite for that change is often being driven by tech companies bringing innovation to deliver traditional outcomes in a more convenient way.


Uber and Hailo are redefining the taxi service; online check-in and mobile-stored boarding passes simplify flying; Amazon makes shopping possible anywhere, anytime, forcing high street shops to close. In business, employees can access anywhere, anytime and from any device, cloud-based sales and project-management tools from Salesforce, Workday and Clarizen, backed up by top-notch customer support and service. As a result, an increasing number of users expect convenience in everything they do.  Financial services are no exception to this new reality.


It’s a fact. Not good or bad, and one everyone must react to if they want to remain relevant. There is increasing crossover between technology companies and traditional service providers. It’s time to catch up. It’s time to embrace new technology.


Today, banks might have a nice looking front end, but it is more than likely to be sitting on complex legacy systems, limiting its underlying capabilities. This leaves them vulnerable to having their customers poached by more capable rivals, who are better equipped to provide financial services when and where the customer needs them.


There has been no change in the need for financial services. Actually, they remain very stable over time. Customers want to lend, save or transfer funds. What is changing rapidly is how they want to have access to these services. Customers have gotten used to having access to all kind of services via digital channels and they expect financial services to be delivered with the same speed, cost, performance and convenience than any other digitized service.  Wherever the customer experiences friction in the products or processes the bank delivers, Fintechs have sprung up: in traditional services like loans, mobile wallets, payment services, but also in value-adding services on top of the typical banking services like PFM. Fintechs excel in addressing a niche need. Look at Paypal, a tech company that started by offering convenient payments to support an online auction. Today, it is a licensed bank, able to offer loans. It’s smart at fulfilling its customers’ needs.


Other successful companies excelling at disrupting with a niche offer include Kabbage, the loan specialist, and Transferwise, which sends cash abroad. The former provides loans to SMEs using e-commerce information for credit scoring – something that is less obvious for a bank to pioneer given the strong regulatory environment. It is this customer-centric vision and a can-do attitude that is fuelling growth. It is expected that the number of Fintech companies entering financial services will only grow when the new payments directive, PSD2, will be implemented in Europe.


However it doesn’t have to be ‘compete or die’. The way forward is collaboration. When the two sides work together, the business benefits can be massive. Where Fintechs excel in agility, customer centricity and technology, incumbent banks have a broad customer base, are trusted, can navigate the regulatory environment and have access to capital.