COVID-19 pandemic has redefined how customers bank. Digital customers now expect financial service (FS) firms to be everyday banks – a single destination – for all lifestyle needs. At the same time, technology players and new digital entrants are making their presence felt through agile and scalable platform-based business models. These models help firms get closer to customers and ensure seamless customer experience (CX). Neo banks (digital players offering partial/full-stack banking services through their platforms) are targeting under-served segments such as small- and medium-businesses and threatening established players’ market share. This trend is driving banks to transition from their traditional pipeline business models into platform-based models. Adopting customer- and design-centric technological innovations will help banks ensure customer stickiness while keeping competition at bay. Further, open banking, which has cascaded globally, underpins the platformification trend.
Platform-based business models are the future of the banking ecosystem. As FS and non-FS industries converge into the blended ecosystem, collaborative synergies will be the key driver for sustainable platforms. Mutual exchange of value and seamless interactions will generate network effects that, in turn, will support sustainability. As embedded finance unfolds as the future of financial services industry, BaaS is emerging as a key trend, even in the Indian landscape. Novel and innovative players that look to deploy embedded and collaborative business models are poised to become frontrunners The age of platformification has dawned in the Indian financial services landscape, and banks that embrace this trend will stay relevant and boost customer mindshare.