Banks and services vendors are turning to business process consortia to enable new digital capabilities
In its latest banking industry report, Next Generation Digital Banking Market Assessment , NelsonHall reveals that banks and vendors are turning to projects focused on setting up business process consortia to enable new digital capabilities, including open banking and real-time payments. And these changes will restructure the competitive dynamics of the industry, moving away from traditional one-stop shops towards greater specialization of individual firms.
Digital banking services is an emerging market, with new vendors entering the space and new products coming to market. Banks are turning to digital technologies because poor revenue growth has impeded their ability to develop scale economies, and they need to increase their customer base to amortize costs over larger revenues; and they also need to harvest greater value from their legacy customer base. Low margins and revenues indicate that aggressive cost reduction is required to remain solvent.
Andy Efstathiou, the report’s author and director of NelsonHall’s banking industry research practice, said: “While digital banking services vendors have created new functionality, much of it proprietary, looking ahead we expect services vendors to focus increasingly on creating ecosystems of technology vendors and consumers. How vendors balance between participating in these ecosystems and generating proprietary IP will determine their long-term success.”
Next Generation Digital Banking Market Assessment analyzes how changes in buyer requirements and operational digital transformation are changing the ‘art-of-the possible’ within the banking industry.
The full report has been published on the NelsonHall website and is available to members of the Banking Operations & Transformation program. To find out more about the report’s findings, or about membership of the program, contact Simon Rodd at [email protected]