Fintech and banking: Platforms in transition

Fintech and banking: Platforms in transition

Image from iStockphoto

Banking faces an extraordinary situation today because several factors have disrupted their core business:

  1. Low interest rates mean that customer deposits can actually cost banks money
  2. Higher customer expectations force banks to invest in mobile and other services to remain competitive
  3. Fintech startups have disaggregated traditional banking services (and customer segments) into components and apps, forcing banks to reexamine core business models and customer relationships

In the short video embedded above, I speak with Ruediger Schmidt, Chief Information Officer of Banco Sabadell, fourth largest bank in Spain, to learn about their response to these issues. The discussion was part of the CXOTALK series of conversations with disruptive innovators.

We have to transform our clients from balance sheet consumers to platform users. Our ambition is to do it a bit like Amazon.

— Ruediger Schmidt, CIO

Banco Sabadell was founded in 1881. Acquisitions have made technical integration a critical competency of Banco Sabadell and have played a strategic role in the bank’s growth.

To manage the changing environment, Banco Sabadell has built a digital platform that enables the firm to offer new services, meet customer expectations, and comply with regulations.

Importantly, the platform offers open APIs, to enable third-parties to use the platform, increasing the scope of services the bank offers to customers. It’s a radical departure from the closed mindset of traditional financial services.

This approach signals a strategic shift from making money based on the bank’s balance sheet to providing services that come from technical assets. In other words, the platform is now the engine for growth, differentiation, and customer satisfaction.

You can read a transcript of our entire conversation and watch the full 45-minute video. It offers a wealth of information and a glimpse inside the digital transformation of a major bank.

To see the list of upcoming CXOTALK episodes, click here. Thank you to my colleague, Lisbeth Shaw, for assistance with this post.

(Cross-posted @ ZDNet | Beyond IT Failure)

Well-known expert on why IT projects fail, CEO of Asuret, a Brookline, MA consultancy that uses specialized tools to measure and detect potential vulnerabilities in projects, programs, and initiatives. Also a popular and prolific blogger, writing the IT Project Failures blog for ZDNet. Frequently quoted by the press on topics related to IT management.
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One response to “Fintech and banking: Platforms in transition”

  1. Oliver Cronk

    I’d challenge point 3 under “Banking faces an extraordinary situation today because several factors have disrupted their core business:”

    Whilst there is a lot of talk about FinTech startups disaggregating banks so far in the UK at least (other than things like Apple/Android/Samsung pay – and these aren’t start ups) I’m not aware this has actually happened? There is a lot of hype about it and I don’t doubt there will be changes but to say this is a current state today problem is a bit of a stretch? It still remains to be seen whether consumers really care enough about this or remain apathetic about switching their bank accounts or the means with which they interface with their accounts.