Organizations can begin developing a holistic vision for the future by considering the impacts of these changes and looking at business models, value propositions and offerings through the lens of a digital native. It’s important to start that proactive dialogue now to understand the current state and design a meaningful future state. Framing that conversation around the why, what and where of this significant disruption is a strong way to start:
1. Gain a deep and specific understanding of what these forces will change in your context. What does digital identity really mean and what role will your organization play when people have more control over their own identity? Disconnects between what was required before and what will be necessary next can hold organizations back. As outdated tools and resources lose relevance — think paper passports in an increasingly digital world — identify where your organization can offer the greatest value for customers and consumers in a Web 3.0 environment.
2. Rethink your business’s “why.” Begin by fundamentally reassessing the social and economic purpose your organization serves. Will that purpose be as needed or essential in the future? Alignment between an organization’s purpose and market need is absolutely critical for ongoing business growth and prosperity, so the very first step every financial institution should do in facing these forces of disruption is to re-examine its customer offerings today to determine whether they will continue to be valuable to their customers tomorrow.
3. Define where your best opportunities lie for developing new value propositions for your customers and your people. Which business streams and revenue models could serve you best in this new world? Chances are, many of the capabilities, skills and resources you already have can be channelled into a refreshed and diversified future version of your organization. From fraud management to data aggregation to open banking: consider which existing resources or practice groups could be put to better and higher use in a digital world. Employ those areas and skillsets as your springboard to new — and relevant — value creation.
What's the bottom line?
Incremental change is one thing, monumental change is quite another. Standing alone, these four forces of change present a series of individual challenges and opportunities for incumbent financial institutions. However, considered together they should create the foundation of a completely new financial services model that will emerge in the years ahead. As a result, getting ahead of the “great convergence” should pay substantial dividends to those financial institutions with the foresight to rethink their current business models before emergent market forces render those models far less attractive or possibly obsolete.
Related articles
Summary
The financial services and payments environment is changing drastically – organizations that seize the great convergence as an opportunity to re-imaging their business model will maintain relevancy in the future.
