Other parts of this series:
In my previous post, I shared our viewpoint that banks that become a Living Business can ignite and maximize growth even in today’s low-growth environment by multiplying consumer contact, conversions and unit sales value.
Interaction of three business components of Banking as a Living Business work together to make it happen: Trusted Financial Services Advisor, Orchestrator of Ecosystems and Participant in Ecosystems “On GAFA1”.
Trusted Financial Services Advisor
This is where banks should solidly establish themselves as trusted financial service advisors in the digital and Open Banking age. It is about operating best-of-breed touchpoints and segment-specific service models to be and stay hyper-relevant, making money from interest and fees on pure financial services (like mortgages, wealth management, credit cards and consumer loans) and being perceived as a value-generating partner. Yet, being a Trusted Financial Service Advisor alone is not enough for banks to cast as wide a net as possible into the marketplace and catch a greater share. They must also reach beyond their comfort zones to pursue new ecosystem-based activities beyond their traditional boundaries with the aim of creating—and benefiting from—a network effect.
Orchestrator of Ecosystems
This is where a Trusted Financial Service Advisor also starts to orchestrate ecosystems in which banks have traditionally played an essential but supporting role. These include housing, travel and healthcare. It increases the cross-sale of pure financial services offers (for example, a housing need that leads to the sale of a mortgage, home security and insurance) and possible additional revenues from ecosystem partners in the form of commissions and cash-backs.
Participant in Ecosystems “On GAFA”
This is where banks become full participants, and competitors, in areas that once were far outside their boundaries. It means packaging and distributing financial services in ways that they are usable on third-party platforms (e.g. GAFAs, retailers and government) and can be purchased with just a click. It also involves the monetization of bank data, algorithms, platforms, APIs and even the bank brand itself—all generating revenue.
Done right, this combination of advisory and ecosystem plays gives banks the basis and momentum to multiply their number of meaningful bank customer interactions and correspondingly fuel growth.
My third and last installment of this blog series will discuss what it takes to master these components of the models, primarily activating eight key enablers of Banking as a Living Business.
Read our latest report, Maximizing Revenue Growth in Retail Banking, for more insights on growing retail banking.
1The acronym we use to refer collectively to the ever-expanding group of industry-shaping technology and platform titans, including Google, Apple®, Facebook®, Amazon®, Baidu, Alibaba, Tencent, WeChat, Uber and Airbnb.