gx-fsi-disruption-digital-banking

Global contacts
Bob Contri
Global Leader, Financial Services
Deloitte Touche Tohmatsu Limited
bcontri@deloitte.com
Rob Galaski
Deloitte Leader for the Forum Future of FSI Project
Deloitte Canada
rgalaski@deloitte.ca
Anna Celner
Global Banking & Securities Leader
Deloitte Touche Tohmatsu Limited
acelner@deloitte.ch
View the full report
Beyond Fintech
Disruptive innovation in digital banking
www.deloitte.com/beyondfintech.
© 2017. For information, contact Deloitte Touche Tohmatsu Limited.

Background Open questions
A 2017 report from Deloitte and the World Economic Forum, “Beyond Fintech: A pragmatic assessment of disruptive Will PSD2 be a game changer Will customers stay interested in open
potential in financial services,” examines disruptive innovation in financial services. for the industry in Europe? banking despite growing issues with cyber
security?
The report identifies 8 key forces impacting all aspects of financial services:
Cost Commoditization: Financial Profit Redistribution: Technology

How will large tech companies enter the
institutions will accelerate the and new partnerships will enable
banking arena?
commoditization of their cost bases, organizations to bypass traditional
removing them as points of competition and value chains, thereby redistributing
creating new grounds for differentiation profit pools
What partners will banks choose to set

How can incumbent banks transfer
Experience Ownership: Power will Platforms Rising: Platforms that offer out their long-term digital strategy?
their competitive advantages to the
transfer to the owner of the customer the ability to engage with different digital world?
interface; pure manufacturers must financial institutions from a single
therefore become hyper-scaled or channel will become the dominant model
hyper-focused for the delivery of financial services
Possible futures
Data Monetization: Data will Bionic Workforce: As the ability of

become increasingly important for machines to replicate the behaviors of
differentiation, but static data sets humans continues to evolve, financial Controlled, As banks focus on cost-cutting, they look Controlled, curated platforms will give much
will be enriched by flows of data from institutions will need to manage labor curated to controlled, curated platforms as a more greater power to the curator, at the expense
multiple sources combined and used and capital as a single set of capabilities platforms economical way to offer services. of customer choice.
in real time
Systemically Important Techs: Financial Financial Regionalization: Diverging Large techs will expand into financial
institutions increasingly resemble, and are regulatory priorities and customer needs Tech As fintechs and banks seek partners to
services, intensifying their customer
dependent on, large tech firms to acquire will lead financial services in different aggregation improve their value chain, large tech firms
relationships and testing regulators’ efforts
critical infrastructure and differentiating regions of the world down distinct paths platforms start hosting major distribution platforms.
to preserve competition.
technologies
To learn more, visit www.deloitte.com/beyondfintech. Here are some of the key findings for the digital banking segment.
An open environment increases
The fragmenting value chain will alter
Open platform competition and compels incumbent
Trends power dynamics as customers benefit from
world institutions to focus on the most valuable
greater competition.
segments.
The drive toward platform models of banking threatens to upend traditional bank
distribution channels.
Key takeways
Distributors or manufacturers: The rise of product platforms in digital banking will force market participants to choose
Where Banks no longer define what customers expect from their banking experience. Instead, financial
disruption has between product distribution (i.e. becoming the platform) or product manufacturing. This decision will have far-reaching
technology (fintech) and large technology companies set the standard.
occurred implications for their businesses and the way they interact with customers, not to mention their competitive landscape.
Fewer, bigger winners: The advantage of being the market leader will increase significantly for both product manufacturers
Incumbents are starting to move core systems to the cloud, as legacy infrastructure makes it and product distributors. Platforms offer customers more purchasing information, which benefits the best products. For
difficult to meet customer needs. distributors, economies of scale in data access and customer awareness will feed a virtuous cycle of growth.
Ecosystem imperatives: No matter what, digital banking institutions will forge more relationships
Where it Few customers have moved away from traditional deposit accounts, despite a forceful challenge with firms inside and outside financial services. This means one partnership will lead to others as
hasn’t from up-and-coming online and mobile banks. digital bankers get better at setting them up.

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Global contacts

View the full report

© 2017. For information, contact Deloitte Touche Tohmatsu Limited.

Cost Commoditization: Financial Profit Redistribution: Technology

What partners will banks choose to set

Data Monetization: Data will Bionic Workforce: As the ability of

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