How to Serve Commercial Clients in the Digital Age
With the gradual transition from landlines to smartphones, cable to streaming platforms, taxis to Uber, or even hotels to Airbnb, the advancements in technology as a result of the Digital Age is already very apparent in our everyday lives. Technology’s tendency to continually evolve and change at a moment’s notice has taken many shapes, whether it be through the release of a revolutionary new app, the announcement of a breakthrough innovation, or the discovery of a more efficient process. Along with the rapid change throughout the Digital Age came society’s need to adapt, adopt, and be proactive in order to stay ahead of the curve.
The same changes that make it easier to travel or enjoy a night out also accelerate our ability to do business, engage with clients or consumers, and process financial transactions needed to operate successfully – all three of which are especially pertinent to commercial banking.
As the Digital Age unrelentingly continues to move forward, it is now more important than ever for commercial banks to adapt, adopt and take the action needed to successfully serve their clients. The question is, how are client expectations changing and how can you keep up?
How technology upstarts are changing client expectations:
In the business banking world, fintechs focus their priorities on building niche digital banking experiences for every business vertical under the sun. With new products and services being offered from fintechs in such niche ways, a McKinsey report suggests that technology upstarts in the commercial banking space are subsequently redefining customer expectations, who now expect a direct, out-of-the-box solution tailored specifically to their individual needs.
These same fintechs, through creating new business models, are finding ways to better meet these changing client demands by providing clients with banking services spanning across all platforms and channels, otherwise known as an omnichannel approach. FISPAN alone has created a suite of offerings consisting of an embedded banking service within ERPs, a companion app, direct APIs, and a contextual browser extension. The likes of fintech giants such as Square or Adyen have successfully expanded their formerly exclusive to web offerings and now dominate much of the mobile e-commerce space as well.
The inherent flexibility and agility naturally possessed by technology upstarts allow for the development of continually innovative products and services that focus on providing an omnichannel banking experience, which ultimately exposes any weaknesses and shortcomings of existing offerings from financial institutions. In recognizing such a competitively dynamic environment, what exactly can financial institutions do to ensure they remain competitive?
How banks can serve new client expectations:
As outlined in the McKinsey report, financial institutions can adopt one of seven strategies that will allow them to continue serving the ever-changing needs of clients. To develop agile innovations in response to technology upstarts, banks can:
- Partner with a fintech
- Serve the fintechs
- Invest in fintechs
- Buy a fintech
- Transform yourself to be more like a fintech
- Build your own (internal) fintech
The first three options are the most feasible, as the latter 3 are either too expensive or banks do not possess the time and resources to engage in them. Regardless of which angle you look at it from, acquiring or building solutions directly in-house is much more expensive, and you would be hard-pressed to find any institutionalized bank that can perform the job both faster and more effectively than a fintech, as discussed here by FISPAN’s very own co-founder, Clayton Weir.
By partnering, banks and fintechs can work together to carefully design products and services that directly align with commercial clients. While banks provide the resources and specific requirements, fintechs are able to deliver on meeting those requirements. Serving fintechs follows a similar suit, where banks can create scaled, efficient solutions that enable fintechs to embed their innovative offerings directly into banking platforms and financial services. Finally, investing in fintechs provides incumbents with the opportunity to learn more about the financial technology startup world and take subsequently appropriate actions once that further knowledge has been obtained.
A recent study conducted by Mastercard to analyze the small business landscape across North America found that in light of COVID-19, 76% have already made strides to become more digital. 50% have bolstered digital service offerings specifically related to payment collection, electronic invoicing, and cash-check processing times, among many other common banking functionalities, with the vast majority of these changes done through fintech services.
However, these strides are not just being made in North America, as the impacts of fintechs can easily be seen globally. Headlines spanning from Mastercard investing in Marqeta and Visa striking a deal with yet another fintech, to the United Kingdom’s biggest banks creating a fintech Pledge are now seen almost habitually, further affirming the fintech movement.
In partnering, serving, or investing in innovation by way of technology upstarts, financial institutions are able to position themselves for future growth and adaptation through real-time, easy access to products, services, data, and channels uniquely developed by fintechs. This is where FISPAN comes into play - how can we help?
How FISPAN enables partners to serve clients in the Digital Age:
The answer to building those omnichannel banking experiences or enabling partnership opportunities lies in offering your banking infrastructure and services in a way that your customers can build their own digital experience from, or that a third-party can build and package a product around.
FISPAN specializes in building integrations into platforms where commercial clients can work more seamlessly and autonomously. Take action with your bank to meet evolving client expectations by partnering with FISPAN, trusted by tier 1 banks to help prepare their organizations for the digital age and bolster their offerings into creating an omnichannel presence.
Early success stories show that offering your bank’s services via API produces a clear revenue uplift when implemented thoughtfully. J.P. Morgan’s Treasury Services APIs have been built into custom solutions that have saved hours of manual work. It’s estimated that banks can expect to experience a 20% revenue uplift by adopting an API-driven approach to offering services, as opposed to a 30% revenue decrease without one.
Here at FISPAN, we partner with leaders in API-driven Open Banking to offer contextual banking services, all while building APIs for our banks. We specialize in building integrations with ERPs where your clients work, and we are able to build for your infrastructure at any maturity level.
In light of all this, it’s safe to say we’ve addressed the very first question in asking how to keep up. The final question is, do you want to?
Contact us here, to schedule a demo.