• Nikhil Sengupta, Head of UK Business Development at Five Degrees


• 24.07.2019 06:00 pm
FinTech ecosystem , Banks , UK , Open Banking

“Over the last decade, we are seeing a transition from traditional banking offerings to an inter-connected web of banking and financial service providers, with technology at its core.

“A 2016 report conducted by Capgemini and LinkedIn of 8,000 retail banking customers in 15 countries shows that half of banking customers around the globe are using financial technology products and services from at least one fintech firm – and this number is growing.

“In the UK, a recent report by EY and HM Treasury entitled ‘UK FinTech On the Cutting Edge, shows the FinTech sector generated £6.6 billion revenue in 2015 alone and attracted £524m in investment, employing around 61,000 people in the sector. The success of the FinTech sector in the UK is attributed to a well-served and well-functioning ecosystem.

“As technology continues to serve as the backbone of the Financial Services industry, for traditional banks to keep their relevance they must focus their efforts on customer experience. 

“The first step is for traditional banks to re-evaluate their notion of who their competitors are and assess their strengths within the FinTech ecosystem. Banks need to open up their doors to collaboration not only with technology partners but with potential competitors: placing customer experience at their core.

“‘Open Banking,’ will not only help banks expand the portfolio of products and services that can be offered but will prevent further cases of IT outages or disruption observed in recent years such as Lloyds TSB and Barclays.

“The opening up of APIs to trusted third parties will equip banks with the technology needed to transform their digital operations, and deliver products to customers quickly and effectively through harnessing 2-speed IT.  At the present moment, existing systems cannot deliver this technology and most digital banking solutions can only deliver partial capabilities.

“The impact of ‘Open Banking’ is going beyond IT operations, reshaping the future of the financial services market. We are now seeing collaborations among banks, fintech companies, and other professional service providers, such as accountants and lawyers.  These service providers will have the possibility to interconnect via banks’ application programming interfaces (APIs), offering a greater range of services to customers.

“For banks to survive they must take a customer-first approach, evaluating their strengths and identifying where they need specialists to help expand the value of their offerings. Working together in collaboration is the only way traditional banks will be able to ensure relevance in a digital age.“