The 2017 World Retail Banking Report explores the future roles of banks and how they can leverage APIs to prepare their strategic roadmaps.

Why is this collaboration with FinTechs unavoidable?
First of all, because these FinTechs are much better able to communicate with their customers and give them a much better experience. Research from Capgemini among customers of Banks and FinTechs confirms this by a higher score of FinTechs on the Customer Experience Index. The differences in scores are even higher for the young people (Gen Y) and those who say to be a tech-savy customer.
Secondly, in recent years, technologies have been made available to enable real-time exchange of information between companies. Within Europe, the use of these technologies is strengthened because PSD2 needs to be implemented by banks. This European arrangement obliges banks to exchange information in real-time with other market participants. Many initiatives launched under PSD2 use solutions from companies like Mulesoft and WSO2.

What does this mean for banks?
Banks need to get started. They must determine what role they want to take in this collaboration. Various alternatives are discussed in the Capgemini World Retail Banking Report 2017.
A first alternative is that a bank continues to offer its own products to the market, using the power of its brand and identity. In order to achieve a better Customer Experience, cooperation with FinTechs and other companies is mainly sought under the hood.
A second alternative is that a bank, in cooperation with FinTechs and other companies, will offer a broader range of products. It is wise to select products that match the brand and identity of the bank. This scenario expects the FinTech to introduce the technology that is needed to bring the different products together on a website or app.
A third alternative is that the bank focuses on the efficient processing of the products and transactions. Offering these products and thereby the customer contact will leave such a bank to others.

The World Retail Banking Report 2017 shows that banks’ executives were still sceptic 1 to 2 years back compared to FinTechs, but they now agree that cooperation with FinTechs is a must. Banks in the Netherlands and Europe are given a fantastic lever with PSD2 to accelerate this. Banks that implement PSD2 as minimally as possible will miss the opportunity to outstand their competitors in the years to come.