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The future of financial services is not what it used to be: How can incumbent banks compete?
Journal of Digital Banking,
9
(3),
198-210
(2024)
Abstract
A relentlessly quickening pace of change in both technology and consumer preferences requires that incumbent retail banks demonstrate mastery of transformative technologies and business models. Two aspects of the future of retail financial services deserve particular attention, in our opinion, for their certain ability to catalyse step changes in banks value delivery to customers: one of them is engagement banking, which is an emerging operating model that leverages artificial intelligence/machine learning (AI/ML) technology and customer behavioural, transactional and third-party data to deliver innovative and intensely personal value propositions to customers in real time. The other is leveraging the open ecosystem: skilfully choosing third-party products and services to integrate with a bank’s existing retail delivery mechanisms and selectively participating in third-party-curated experiences by enabling access to data and offering their products and capabilities via third parties. This paper describes the promise and risk of leveraging engagement banking and the open ecosystem. The benefits for enterprising banks are great, and yet so are the risks, if these aspects are not executed extremely well. They deserve banks’ full attention.
Keywords: Innovation; engagement banking; financial wellness; sustainability; embedded finance; partnerships
The full article is available to subscribers to the journal.
Author's Biography
Zilvinas Bareisis is a director at Celent, a global research and advisory firm specialising in Financial Services. Bareisis leads the firm’s Retail Banking and Payments practice and is based in London. His research focuses on the impact of technology-driven change in banking, with an emphasis on consumer payments, digital identity and the open financial services ecosystem. Bareisis is a regular speaker, chairman and panel moderator at leading banking industry events and has been widely quoted in the press. He has over 25 years of experience advising senior executives at the leading financial institutions and their technology and service providers across a broad range of strategic issues. Prior to joining Celent, Bareisis was a principal at Oliver Wyman, a management consulting firm. Bareisis holds an MBA with honours from Carnegie Mellon University and MSc with honours in Applied Mathematics from Kaunas University of Technology.
Bob Meara is a principal analyst in Celent’s Banking practice, with a research focus on digital banking and customer engagement technologies. He has led multiple consulting engagements, including proprietary research projects involving financial services hardware, software and the impact of self-service on branch banking. He is also a frequent speaker at industry conferences. Before joining Celent, Meara held positions in product management and product marketing in such firms as BellSouth, Hayes Corporation, and Procter & Gamble in addition to being a commissioned naval officer. Meara earned a BS in Applied Physics and Electrical Engineering from Case Western Reserve University.
