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How a focus on ecosystem play is important for financial institutions to stay relevant
Journal of Digital Banking,
6
(2),
120-129
(2021)
Abstract
The territory traditionally occupied by financial institutions is seeing new competition not only from financial technology (FinTech) players but also from non-financial services players. These non-financial services players offer payments, insurance lending and wealth management in addition to other services such as e-commerce, ride hailing or food delivery. To stay relevant, financial institutions need to venture beyond their immediate fields and explore partnerships and ecosystem play. The rise of FinTechs and consumer platforms in South-East Asia comes at a point where customer pain points and unmet needs have long existed and yet not been addressed. Hence, FinTechs and consumer platforms had the opportunity to leverage this gap to entrench themselves in the value chain, and grow in prominence, riding on the region’s strong fundamentals and widespread digital adoption as well as supportive regulatory developments. This paper discusses the growth of FinTech and consumer platforms and explores how participation in digital ecosystems may be the answer to the existential question that financial institutions face. It also lists the different roles that financial institutions can consider in an ecosystem and the five fundamentals of effective participation. As FinTech providers become more popular with customers through lower fees, greater convenience and higher returns, financial institutions need to transform to maintain their market share and competitive advantage. This means streamlining business and operating models, leveraging data analytics, adopting new technologies and transforming talent.
Keywords: ecosystem; APIs; business model; FinTech; digital transformation; collaboration
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Author's Biography
Nam Soon Liew is EY Asean Regional Managing Partner responsible for business performance and client services across assurance, consulting, tax, strategy and transactions services in 14 geographic markets. Prior to this, he was EY Asean Markets Managing Partner and EY Asean Financial Services Managing Partner, working with some of the largest financial services institutions across Asia. Nam Soon has extensive consulting and industry experience in retail, corporate, investment and private banking; asset management; insurance; private equity and FinTech. This includes advising senior executives on business strategy, digital transformation, risk management and governance, regulatory compliance, M&A and managed services. He is also experienced in helping businesses to design and implement target operating models, manage cross-border operations as well as build ecosystems and alliances across different sectors. Nam Soon holds an MBA from Imperial College London and a BEng (Hons) from Nanyang Technological University, Singapore.
Vinay Pamnani is an Associate Partner with the Financial Services Consulting practice, focusing on digital banking, digital insurance and FinCrime technology at Ernst & Young Advisory Pte. Ltd. He has more than 14 years of experience in serving leading financial institutions in applying for licences and setting up digital banks, utility and managed service operations, advising on large-scale transformations, conducting current- and future-state assessment and target state design, advising on process improvement and assessing financial viability for client projects. Vinay holds an MBA from the Indian School of Business and a BBA from the University of Texas in Austin.
