11 minute read 16 Jun 2022
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How can harnessing the power of ecosystems make finance effortless?

Financial services companies can build ecosystems to create value for all stakeholders – but must transform their operations to deliver.

In brief
  • Retail and commercial customers are demanding more highly integrated and digitally available financial services.
  • Financial Services companies need to rapidly adopt an ecosystem approach that will increase their adaptability.
  • Defining your position within an ecosystem while transforming the business and operating model that underpins your proposition is critical to success.

Ecosystems are gaining traction across all sectors thanks to their ability to unlock up to $100 trillion of value for business and wider society over the next decade, as estimated by the World Economic Forum (WEF). Amid the rapid growth of digital technology, changing customer expectations and the need for organizations to rebuild trust and resilience, ecosystems offer advantages that traditional ways of working and partnering cannot.

We define ecosystems as purposeful arrangements between two or more entities to create and share in collective value for a common purpose and customer. Respondents to the EY CEO Imperative Study (Ecosystems survey) have taken note of their potential — 31% said ecosystems now form part of their overall strategies.

In particular, the financial services (FS) industry has a pivotal role to play in the ecosystem story. As well as participating in ecosystems that benefit customers in their core business areas, banks, insurers, wealth managers and investment firms are seeking to participate in ecosystems that exist in other sectors. 

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Chapter 1

Why FS companies are looking to ecosystems

Ecosystems are increasingly creating long term-value and the FS industry is optimistic about unlocking the embedded finance opportunity.

Companies from a wide variety of sectors want to use finance to provide a more seamless experience to their customers. For example, an e-commerce giant has opened up physical grocery stores where customers who are signed into their app can pick up what they want to buy and exit without having to visit a checkout.

This demonstrates the power of the customer lifecycle — which begins at the first engagement with a brand and continues all the way through to the after-sale experience — over the product or service lifecycle. By making the overall experience simpler, quicker, and easier for customers, the retailer can differentiate itself and create more value.

FS companies can help non-financial companies improve their customers’ experience by making finance more effortless. The integration of financial services into non-financial value chains, known as embedded finance, via ecosystems makes this possible. It is already helping car manufacturers to offer subscription services and enabling telecoms companies’ customers to charge the cost of movie rentals and other content to their phone bills.

Consequently, it is no surprise that two-thirds of FS sector respondents to the EY Ecosystems survey said ecosystems were extremely important to their company’s future success. A further 88% indicated their satisfaction with how ecosystems have contributed to their company’s business. 

The ecosystem era has arrived in FS


said ecosystems are very important to their company’s future success.

Growing belief in the potential of ecosystems

The FS industry’s optimism about ecosystems is being fuelled by their ability to create long-term value. In the next three years, for example, one-quarter of FS respondents to the EY Ecosystems survey predicted that ecosystems will account for at least 20% of their revenues. A further 39% forecast that they would account for between 10% – 19% over the same period. 

This growth will be driven by new markets and new offerings that ecosystems can help to create. While a majority of FS respondents (55%) said increased efficiency and cost reduction was the biggest advantage ecosystems offered over traditional operating models, 54% cited extending into new geographies and 47% mentioned creating a new joint product.

These statistics indicate that FS companies recognize the need to adapt and that their ability to pivot toward more dynamic business and operating models will directly impact their market share and potential for growth.

But succeeding at ecosystems should not be taken for granted. While there is recognition of the need to embrace an ecosystem approach, many companies are not culturally or structurally prepared to participate in, orchestrate or monetize them. Addressing the challenges inherent to ecosystems are crucial to unlocking their opportunities.

Establishing one’s role within an ecosystem, for example, is commercially, operationally and technically complex. Reaching internal agreements on areas such as cost allocation and strategy, and maintaining cyber security — a crucial area of focus given threats — are other obstacles that need to be overcome.

Yet data suggests such concerns are not proving to be a disincentive. Seventy-seven percent of respondents to the EY Ecosystems survey said they had four or more ecosystem relationships, compared to 23% who said they had up to three relationships.

FS companies engage in multiple ecosystems


said they had four or more ecosystem relationships

Unlocking the embedded finance opportunity

From direct-to-consumer retail to complete homebuying services delivered on an app, companies from a wide range of sectors are acting on their belief that they cannot serve their customers on their own — especially when it comes to ensuring their financial peace of mind.

To deliver the experiences customers increasingly expect, embedded finance is becoming not just a nice to have, but a must have for many businesses.

Take Tesla, which offers an insurance product that is based on real-time driving behavior. This ecosystem includes the electric vehicle firm, an insurance company, a telematics specialist, and payment and billing providers. The end goal is a more accurate, competitively priced product that a customer can purchase at the same time as the vehicle — thereby saving them time and effort.

But embedded finance is not just for technologically savvy companies. Traditional organizations are reacting to weak margins in their legacy businesses by adding embedded finance to new digital services. Increasingly, sectors including automotive, healthcare, retail, education, and telecommunications are turning to direct payment, protection, and lending products.

This combination of new players and increased demand for quicker, more seamless payments from incumbents means embedded finance is projected to have a market value of $7.2 trillion in 2030 by the WEF. 

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Chapter 2

Three focus areas for organizations

To capture the wider potential of ecosystems, organizations need to focus on three key areas.

1. Identify where and how an ecosystem can create value

It is crucial to recognize that value is not just financial in nature, nor just about products and services. “People feel the quality of their time is as important as the quantity of money in their bank account. They’d rather stay in than go out. They want to buy experiences rather than more stuff,” explains the latest EY Future Consumer Index.

What customers value and the experiences they expect are changing across industries — just think how quickly digitally native banks, mortgage providers, and loan companies have gained significant market share around the world for both B2C and B2B businesses.

To succeed over the long term, organizations need to work out how to offer customers, clients and stakeholders things they value and engage with them where they are. For FS companies, this could mean retail customers wanting to buy a new home, not a new mortgage product, or business customers wanting to expand into new markets, not worry about export declarations, finance and taxes.

To help you imagine what your customers want and how an ecosystem partner might help you to serve that need, asking some key questions can serve as a useful exercise. For example:

  • What are they really trying to do?
  • What do they want from you?
  • How could you work together?

To imagine what non-FS customers might want and how you can participate in an ecosystem to serve them a different set of questions need answering. For example:

  • What is the principal outcome the customer wants from the asset or service they are seeking?
  • What will add value to that experience at the point-of-sale and throughout its lifecycle?
  • When the customer requires a financial product during that lifecycle, why and what do they view as value (e.g., speed of execution, security, accessibility)?
  • What is the way your enterprise can add the greatest value to that experience (directly or indirectly)?
  • What would you need to do differently today to be able to achieve that outcome?
  • Case study: Leveraging emerging technology for a better experience

    Microsoft’s gaming platform Xbox was aware of pain points that existed in a specific part of its supply chain. Legacy technology meant securing and managing royalties was a slow and cumbersome process for the thousands of developers, designers, and publishers that the company and its end customers relied on create games. To overcome the challenge, Microsoft worked with a range of collaborators, including EY, to develop and implement a blockchain solution. The introduction of automation, real-time data, and smart contracts cut access to royalties from 45 days to just four minutes, improved transparency, and helped enabled partners to improve forecasting and reporting capabilities.

2. Define your role in the ecosystem

Ecosystems can be complex structures that constantly evolve, so it is important to understand the role that you and other participants can play to create, capture and share value for everyone — including your customers.

At a basic level, there are three clear roles: orchestrator, enabler or customer.

  • Orchestrators are the organizations that drive the ecosystem’s value proposition. Often, the orchestrator is also the company that has the clearest brand identity with the end user.
  • Enablers are the other organizations working with the orchestrator to deliver the value proposition.
  • Customers are the end users or organizations that are the core beneficiary of the value proposition.

Which role you play will be dependent on a number of factors. Nearly half (48%) of FS respondents to the EY Ecosystem survey said that they participate in a model where a leading participant, often a software company, provides an open platform on which developers can build branded products. In this instance, the respondents are enablers. But it’s not just tech platform providers that can take the lead.

“The key to defining your ecosystem role is working out what is most appropriate to the skills your organization possesses and your ability to deliver it in a way that nobody else can,” says Aaron Byrne, EY-Parthenon Financial Services Leader.

  • Case study: Leaning into emerging business models

    Swiss Re and Daimler Insurance Services are teaming up to act as orchestrators of an ecosystem they are hoping will capitalize on changing dynamics in the mobility space. As customers move from vehicle ownership to usage and new technologies such as advanced driving assistance systems come into use, more flexible and digital insurance offerings will be required. The new venture, Movinx, launched in 2020 with the aim of co-creating new offerings in partnership with vehicle manufacturers and other interested parties. 

The key to defining your ecosystem role is working out what is most appropriate to the skills your organization possesses and your ability to deliver it in a way that nobody else can.

3. Transform to accelerate delivery

Once you have identified a new value proposition and defined the role you could play in an ecosystem that will deliver it, you need to ensure your business is fit-for-purpose. This may not be as simple as it sounds.  

Ecosystems require a different leadership vision, management mindset, and technology infrastructure to stay close to customers and work with the best partners. They must constantly adapt to changing conditions to keep delivering what the customer values and require openness and collaboration with other participants.

One way to help this happen is to set up a dedicated ecosystem function and appoint an individual at the highest level in the organization who can move ecosystems from a silo to an enterprise-wide growth and value-creation strategy. That individual will be best placed to assess what new capabilities are required and whether you need to buy, build or partner to access them.

Whichever capabilities are needed and however you plan to acquire them, successful FS ecosystems rely on these essential criteria: connectivity, speed and trust.

Connectivity determines how well you deliver for your customers and partners.

It means connecting with customers where they are, whether that be social media or online marketplaces. But it's also about connecting with partners aligned with your proposition and your purpose and having the interoperability to work with them.

Speed is a function of your platform strategy and your ability to work differently. 

Using cloud and automation technologies alongside agile methodologies, for example, will help you remove friction and adopt new processes so you can think, experiment, and move faster. At the same time, you need to be able to move quickly as the market changes and pivot ever more speedily to new business models.

Trust holds your ecosystem together and helps you to perform your chosen role. 

It can be secured by consistently delivering on your purpose and proposition, and by being a valued and reliable partner. But it’s important to realize that trust can be undone if value is not ultimately created and the accountability of ecosystem partners is not tracked and accepted. Putting in place appropriate governance structures can help to mitigate any issues. When there’s trust, new ways of creating and sharing value become possible and your employees become resilient to transformation.

Alongside these criteria, all successful ecosystems focus on what creates value for customers. Defined metrics should reflect how value is delivered and how performance is measured in an open and transparent way. It’s important to articulate a clear link between the metrics that measure meeting the customer needs and how they will ultimately translate into value for the group and its stakeholders, including investors and shareholders. While financial KPIs are an obvious place to start, it is important that FS organizations deliver on their purpose and provide financial well-being to customers, employees, and society.

Bringing all these elements together is hard but not impossible. EY Nexus, for example, offers transformational technologies, data and services from a range of trusted partners in an easy-to-use, cloud-native platform. Optimized for the FS industry, it accelerates innovation and powers frictionless customer experience through a curated and trusted ecosystem of partners that any company can tap in to.

  • Case study: Reimagining the in-app experience

    EY worked with a top ten global bank to redesign an existing payments app, create an e-commerce solution, and build a data insights engine that enabled real-time offers and notifications. The bank leveraged EY Nexus for Banking – a cloud-native platform that can be used to design, build, launch and enhance propositions via a curated ecosystem of trusted partners – to solve reliability and scalability issues with the app and add value with e-commerce and data insights. The partnership removed bugs from the app, helped to more than double the number of users, and built new relationships with local vendors. 

Of course, transformation is not a question of replacing the old with the new. Legacy systems still need to run alongside new technologies, adding an extra layer of complexity. Ensuring you have the capabilities to manage both will be important as you engage in ecosystems.

A roadmap to make finance effortless

Do you know what your customers really want? Do you think your organization can provide this on its own? If the answer to both these questions is “yes” then, increasingly, you are in the minority.

Companies are aware that alliances are needed to deliver what customers want and to access capabilities that remove friction and cost while building agility and resilience. This is particularly true for FS companies — just 29% of FS respondents to a recent EY Tech Horizons survey said ecosystems were too difficult to execute or manage.

“By identifying where and how an ecosystem can add value, defining your role, and transforming to deliver — FS companies have a roadmap that will enable them to make finance effortless for their ecosystem partners and their end customers. That will increasingly make FS providers key to delivering the value that ecosystems promise,” Jan Bellens, EY Global Banking & Capital Markets Sector Leader.


Rising demand for seamless customer experiences underpinned by ecosystems provides financial services companies with a rare opportunity to reframe their futures. But the window of opportunity to make this pivot is limited. By leveraging innovative technologies and rethinking business models to serve the end customer better, they can create, capture and share value like never before.