The gap between what customers expect and what traditional banks currently deliver has never been wider, but now is the right time for banks to catch up from front to back-end to offer the best customer experience. With data-fueled, hyper-personalized experiences in real-time, BigTechs and challenger banks have demonstrated their ability to win customers over. In contrast, while traditional banks have invested heavily in front-end IT infrastructure to improve customer experience, efforts so far have not measured up to what has become customary across other sectors, especially with tech providers. For banks to remain appealing and competitive in this shifting landscape, the report highlights that they must transform into agile and customer-centric Inventive Banks by embracing Open X as well as take on a specialized role, rather than a universal one, such as supplier or aggregator within the new open ecosystem.
The way forward: effective structured collaboration is essential for bank and FinTech partnerships to be successful
Both Banks and FinTechs are currently frustrated by the lackluster results of their collaborations to date. The World FinTech Report 2020 revealed several pain-points:
- Only 21% of banks say their systems are agile enough for collaboration
- Only 6% of banks have achieved the desired ROI from collaboration
- 70% of FinTechs don’t culturally or organizationally see eye-to-eye with their bank partner
- More than 70% of FinTechs say they are frustrated with the incumbent’s process barriers
- Half of FinTech executives say they have not found the right collaborative partner