Financial Industry

New business models in banking

Customer expectations and trends in banking are changing. New players emerge (FinTechs), and we see global services aggregation platforms, such as Amazon, Facebook and Google, enter the financial services arena ever so boldly. What do these changes mean for the future of the entire market? Where is the banking industry heading and what new business models are opening up for it?

We discussed these issues during the 13th edition of the Banking Forum with Marcin Kotarba (Deutsche Bank), Marek Kucharski (, Jerzy Kalinowski (KPMG), Esteban Sossa (ApPello) and Michał Turalski (KPMG).

Customer Experience is like a football referee

In the omnichannel era, the concept of Customer Experience has become the Holy Grail of every business. Whatever the industry, we want to provide the best experience to our customers. But what does that mean?

A good referee is the one that is invisible during a football match. We have no objections as to his decisions, and he doesn’t interfere with our pleasure of watching the game. The same is true for technology. It is best experienced when it is transparent to us, because the entire process is so intuitive and natural. The entire shopping journey goes smoothly, without any unpleasantness or interruptions. We seamlessly go through subsequent steps of the process, changing channels or devices for our convenience, if necessary. It was a long time ago when Steve Krug, the guru of UX designers, summed it up simply: “Don’t make me think!”

Personalization on a macro scale

One of the most important trends in the banking sector is building strategic partnerships that allow businesses to look for new opportunities to deliver value. An example of this can be vertical solutions, i.e. enterprises addressed to a specific, precisely defined customer sector.

This approach means a new level of personalization on a macro scale because personalization can mean not only adjusting messages to an individual recipient but building a separate service for a particular niche. This is what FinTechs often do - by satisfying specific, unusual needs of a certain group of customers, they can win their hearts and wallets. However, a narrow, dedicated customer approach is a big challenge for universal banks, which direct their offer to as wide audience as possible, and often do not wish to focus on a single segment of recipients.

FinTechs and aggregation platforms

Today, banks need to broaden their scope of operations and move closer to the model of aggregation platforms, such as Amazon or Google. An example of such a practice is, described by its Vice President, Marek Kucharski, as a FinTech

Spiteful people say that a FinTech is built with an inherent idea of selling it to a bigger player. All because the effect of scale - obtainable only by a powerful entity - ensures the profitability of such a business model. But the example of contradicts such a thesis. The platform’s success comes not from the use of ING's customer base, but from understanding the customers, focusing on their experiences and shopping journeys, and on technological tools. Not without significance is also the adoption of an agile methodology of operations that is characteristic of start-ups. Trading and auction platform for ING Group


It shows that what banks will have to learn in the near future is to focus on customers, understand them, and to adopt agile methods of operation.

The use of risk management mechanisms

When thinking of new business opportunities, it is worth considering what unique values banks have to offer. One of the primary values are risk management tools. It is possible to find new applications for them, beyond just lending money.

Imagine an online store that uses the bank’s risk management tools: when it identifies a "stable" customer, it can offer that customer a chance to do the shopping with an option to pay later, and a liberal return policy. The “Buy what you want, pay when you want” message would set a new level of Customer Experience. If a particular bank provided such a customer authentication service, the store would trust the bank and its risk assessment.

In any case, the close cooperation of the banking and e-commerce sectors is already a fact. More and more often, banks draw inspiration from online stores, and even launch their own e-commerce platforms.

Risk management mechanisms may also be useful in the context of the increasing popularity of the sharing economy. According to this trend, we will no longer buy goods so often, because we can use them whenever we need them. Instead of buying your own pruning shears, you can borrow it from a neighbour - even for a fee. AirBnB and Uber have shown that sharing what we own and using what others share with us is just paying off. Banks will be able to provide their support in evaluating the credibility of the other party to the transaction.

Being like Jeff Bezos

Understanding the customer, focusing on Customer Experience and technological innovations - all this becomes a necessity for the banks that want to keep up with the customer. New opportunities are opening up for them as well: new applications for the banking tools, searching for new partnerships, addressing niches, joining in the sharing economy, or inspiration from the world of start-ups.

A valuable lesson to be learnt from this area is the willingness to test new solutions and prepare today for the more distant future. Jeff Bezos has just announced that once a year he will sell $1 billion worth of shares in a steadily growing Amazon and will devote this amount to his other venture - Blue Origin, which deals with space travel. So, the question remains - what is the equivalent of space travel for the banking industry?