A facilitator platform provides a setting for collaborative innovation that speeds decision-making and enhances the customer experience.
As new technologies evolve, banks are seeking innovative ways to enhance their capabilities. They know that today’s consumer wants more than traditional full-scale banking services. Many would prefer to pick and choose which financial products best meet their needs, such as know your customer (KYC), management information, underwriting processes and data analytics. It’s more like a “plug and play” analogy where a ready-made business model brings services together on one technology platform.
As a facilitator, a bank can bring together existing and potential customers and provide an open platform in a community setting or virtual room where they can interact. Banks can be their own customers or customers of other organizations – or they can function as a demand aggregator or a marketplace. This interaction across participating organizations creates a unique and collaborative environment that encourages innovation at a fast pace.
Why is a facilitator platform so attractive?
A bank as a facilitator develops specific banking and non-banking components and products. It provides the platform to SME customers, as well as financial services (credit, deposits and foreign trade) and non-financial services (training, international support, business planning, legal and fiscal support).
The platform can be accessed using a variety of channels including the web, or an app. These can be enhanced by digital technologies which enable providers to interact with their customers directly. Components can be easily integrated into the purchaser’s own technology, and easily adapted or replaced.
A bank as a facilitator uses the insights gained from these interactions with not only its own customers but also those of other organizations, to continuously test, refine, improve and develop new products and services.
How the bank benefits
Collaborative innovation enables the bank to co-create and manage client, methodological and technological standards that can be shared by all parties. Developing industry-wide standards and attracting a meaningful number of participants will cover the relatively high fixed costs of supporting the platform.
Since the bank owns the platform, it derives its revenue from usage fees, consultancy fees, licensing services and maintenance charges. Simply stated, the model resembles that of a distributor.
This approach can be successful, but there are challenges. Managing a continuous delivery model with different services developed by different market players could be a major hurdle for some banks. And, it will not be easy to ensure the technological expertise required to manage the front and back office platform.
Drawing on insights
Collaboration and interaction are key to this approach. It will require continuous sourcing of external firms over a wide ecosystem. Using the insights they have gained from others, banks will be able to exchange information with one another and their customers.
Consider the analogy of an elephant dancing the tango with a mouse. At some point, there needs to be a facilitator – someone to instruct the elephant to dance at the same pace as the mouse. For banks, it’s an exercise in speeding up the decision process and leveraging agility to make the experience smoother and more rewarding for the customer. This is particularly relevant as they cope with regulatory and compliance issues.
EY has identified five ways that banks can reshape their future: as an experience, marketplace, service provider, facilitator and producer. This article is part of a series that highlight the features and benefits of each. Under this new direction, none of the five ways are vertically integrated. Banks could adopt one approach or a combination that will help them truly differentiate their bank from others.