During the 2008 financial crash, the global economy lost close to USD 1 Tn from debt. While the world tried to recover from the slowdown, a new predicament posed as a challenge to the Banking industry – new-age Fintech firms. The steady and quick rise of Fintech firms in the world has shaken the presence and role of conventional banking. The past few years, especially after the pandemic, have put tremendous pressure on banks to become more digital-first and adapt to recent times. With a looming recession on the horizon, there is all the more reason for banks to step up their game, and have adequate coping mechanisms in place – across people, processes, and technology.
There was a time when banks were strictly regulated, but the increase in financial transactions online demanded that Fintech players also enter the payment industry. Technology companies’ foray into the conventional banking constructs, have made banks question their offerings and feasibility to cater to the evolving customer needs. But with a few strategic initiatives and consolidation of their offerings, banking can take a new turn.
Today’s Fintech penetration should be perceived as an opportunity rather than a threat. Banks collaborating and creating partnerships with Fintech is the way forward. Right from payments to mortgages and lending, banks will need to refine their services. Collaborations between hyperscalers demonstrate the Banking industry’s need to explore pricing optimization, fraud detection, and risk management together with technology players.
In this point of view, “Competition, Consolidation, and Co-opetition in Banking,” we put forth what the Banking industry can do to stay relevant, modernize, and keep up with trends. We identify a comprehensive strategy for banks to tackle competition and create a customer-focused strategy. Banks can leverage the insights from this POV to renew the viability of their business proposition for today’s dynamic business environment.