BANKING ECOSYSTEMS
“ WITH THE INTRODUCTION OF OPEN ECOSYSTEMS , BANKS FACE A NEW CHALLENGE : OPENING THEIR DATA TO THIRD PARTIES WHILE ENSURING CUSTOMER CONSENT ”
SESHIKA FERNANDO VP , HEAD OF BANKING AND FINANCIAL SERVICES , WSO2
There is no appetite for tech firms to become mired in a pool of regulations ; they are able to remain agile “ by walking the tightrope ” of compliance , avoiding an incurrence of full-blooded regulatory requirements according to Pattni .
He notes : “ If big tech goes too far , these firms are going to become fully regulated , and then they ’ re going to have to spend all this time and money on all the things banks do . But they ’ re trying not to cross that threshold , their margins stay higher that way .”
So , while the threat of big tech swooping down to eat the lunch of legacy banks may not be in the interests of technology firms , it is still imperative that big banks reposition their systems to operate across ecosystems , lest they be outmuscled by challenger banks .
Most banks know it too , it ’ s just a case of updating legacy systems as quickly as possible to keep pace with technology and customer expectations . Once they do , though , the future of banking as part of a financial ecosystem looks bright .
THE FUTURE OF BANKING : FINANCIAL ECOSYSTEMS In fact , once banks reposition themselves to a secure data-sharing model , they don ’ t even necessarily have to build ecosystem models from scratch .
As Fernando notes : “ Ecosystems have already been formed , driven by the emergence of fintech startups , big tech firms , and other players within the financial services industry . Instead , banks can participate in these ecosystems by leveraging APIs and connecting their systems and services with external partners .”
There is a warning , though , for those that don ’ t integrate their services into a broader digital ecosystem – they may get left behind in this era of digital revolution .
Raphael Bianchi , Senior Partner at Synpulse and President of the Openwealth Association , says : “ To be part of the digital revolution , companies must stick to what they do best and focus on joining existing ecosystems to help them integrate seamlessly with providers and help provide clients with the digital experience they expect .”
Despite the ever-hastening need for banks to join ecosystems , for Pattni , it ’ s just “ a matter of time ”. He concludes : “ As banks get all the pieces of the jigsaw into place , we ’ ll definitely start to see more adoption of ecosystem models in the coming years .”
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