4 charts, Member Exclusive

4 charts on retail banks moving to platform-based business models in 2020

  • Study finds banks with platform-based business models more likely to survive new digital demands from customers
  • Retail banks struggle with shedding legacy systems
close

Email a Friend

4 charts on retail banks moving to platform-based business models in 2020

Banks are no strangers to the pressures of digitalization. But with Covid-19, retail banks now face the added challenge of adapting their services to a digital environment as quickly as possible, as customers continue to demand transaction support, account information, and reassurance.

To continue to provide customers with the services they want, banks need better handling of data to understand user behavior, as well as an easy-to-navigate interface for their customers.

According to Capgemini’s 2020 World Retail Banking Report, banks should consider adopting a platform-based business model in order to be more equipped to tackle these challenges.

A platform-based business enables third-party services to be added to core products and facilitates the exchange of information, goods, and services. For banks this would mean teaming up with fintech firms and subsequently becoming a platform for their financial services.

How the platform-based business model helps companies reach business priorities


This content is available exclusively to Tearsheet Outlier members.

Tearsheet Outlier information and signup Missing out? Subscribe today and you’ll receive unlimited access to all Tearsheet content, original research, exclusive webinars and events, member-only newsletters from Tearsheet editors and reporters and much more. Join Outlier now — $59/mo Already an Outlier member? Sign in to your account

2 comments on “4 charts on retail banks moving to platform-based business models in 2020”

  • The report emphasizes the importance of building an API network that drives collaboration with ecosystem partners in enabling new products/services and building customer loyalty. More importantly, however, is to support a network of standardized APIs, which are interoperable, built on consensus, and work for all ecosystem participants. Adopting a standardized API for financial data sharing – such as the FDX API – won’t only keep development costs low and foster market choice and innovation, but ensure your firm needs to maintain just one API vs. sustain a costly maze of proprietary data sharing methods.

  • A platform-based or open API approach is vital to the success of retail banks. Regional and community banks, in particular, are struggling to compete due to outdated systems. Since replacing an entire legacy core banking system isn’t always realistic, a platform-based approach enables banks to improve one piece at a time. The banks that I have seen do this successfully set clear goals for their institutions, such as raising $100 million in deposits in 5 months, and then build their digital strategy and vendor selection process around these outcomes.

    We are at the beginning stages of unbundling banking infrastructure. The next big wave in fintech disruption is sure to be felt by the legacy vendors that have grown complacent by the lack of competition. And this will hopefully lead to a shift in banks viewing technology purchases as investments and not solely as expenses.

Outlier OpinionsMakers

Member Exclusive

Outlier Briefing: Best practices in digital onboarding with Ted Brown

  • The move to digital banking has focused on customer acquisition.
  • Today's guest explains why onboarding -- what happens after a new account opening -- is even more important.
Zachary Miller | October 01, 2020
Member Exclusive, Online Lenders

Goldman Sachs partners with Walmart to offer SMB loans to online sellers

  • Goldman Sachs has built its retail Marcus brand into a $100 billion bank.
  • It continues to sign partnerships with leading brands to provide financing to their customers.
Zoe Murphy | September 24, 2020
Member Exclusive, New banks

Tracking $1.2 trillion of invoices, Intuit’s plans for small business banking are bigger than QuickBooks Cash

  • QuickBooks Cash is Intuit's entry into small business banking.
  • But the accounts represent a much more strategic financial services vision for the software company.
Zoe Murphy | September 23, 2020
Member Exclusive

Data Snacks: New data shows the majority of SMBs didn’t even bother to apply for PPP assistance

  • SMBs have struggled to survive during the pandemic.
  • A new survey shows that in spite of all the fintech resources, many didn't even bother applying for relief.
Zoe Murphy | September 17, 2020
4 charts, Member Exclusive

4 charts on the impact COVID-19 has had on consumer fintech adoption

  • With branches closed, Americans needed the lifeline that fintech provided during the crisis.
  • The number of fintech apps and the frequency people use them have both increased.
Zoe Murphy | September 15, 2020
More Articles