Page 40 - Banking Finance September 2023

ARTICLE

Need for a Digital Banking Ecosystem the previous paradigm (Provider based ) to the new
paradigm (need based ) aided in the creation of one -
Many of the financial institution customers have moved on
stop shop ecosystem to meet the want and the needs
from the principal financial provider, while many of them
of the customers. Banks can now embed their products
are considering to do so .This is the reason why many of the
and services at the place of need, such as embedded
Banks must evolve if they want to retain their existing
finance in this paradigm. Over the next few years
customers and perhaps attract new ones.
,customers can now expect their bank to provide them
Regulations : Many Banks should allow to access to
with more personalization, proactive services and
customers data and online payment capabilities using
connected omni channel experience.
the API technology, with specific consent. Many of the
new customers are introduced to the ecosystem each
month as a result of open banking enabled products The Benefits of Digital Banking Ecosys-
being used by both users and enterprises around the
tem
world.
Banks in digital ecosystem have a number of substantial
Increased competition : Many of the Fin Techs are
advantages built in, including strong customer relationships
taking the advantage of the decreased barrier to enter
and well-known brands. Banks, the customers as well as all
into the financial services market by using their technical
the other stakeholders can all profit when the strengths are
enterprise and the superior digital cliental experience.
joined with third party artificial Intelligence (AI ) and cloud-
Due to the very limited services which is being offered
based solutions.
by the challenger banks, few of the customers have
Increasing the reach and the quality of digital
totally transmitted away from the former banks.
products : Working with the technology partners can
Increased digital and technical investments : Banks be helpful for a Bank to extend its digital distribution,
are increasingly investing in the technological systems improve the quality of the products and reduce the
and data both globally and locally. This lowers the client acquisition expenses.
operating costs and provides a foundation for new
Providing other eco systems with access to Banking
revenue streams.
Services : Generally, when customers transact in other
Changing Customer Behavior : A paradigm shift from eco systems, they demand the seamless access to bank

40 | 2023 | SEPTEMBER | BANKING FINANCE