Banks and FinTechs collaborate via different engagement approaches

Each collaboration uniquely satisfies the specific needs of its participants and is built on models…

It wasn’t that long ago that traditional banks viewed FinTech firms, or Fintechs, as competitors. Those days are way behind us. Nowadays, incumbents and FinTechs have become best friends, or at least collaborators, to leverage each other’s complementary strengths and focus on shared goals.

FinTechs are constantly disruptively unbundling many traditional banking services by simplifying and improving customer experience (CX), and customers aren’t shy about showing their appreciation. From the start, FinTechs have focused on resolving financial services’ inefficiencies and high-friction approach to customer service. Bolstered by operational advantages including a lower cost base, no burden of legacy systems, emerging technology adeptness and a culture of taking risk to best serve the end customer, FinTechs hit the ground running to provide an engaging, contemporary CX.

Traditional financial institutions have a vast customer base and deep pockets. Due to legacy systems, their solution to innovation is to adopt an API culture. As such, they are now very open to collaboration with smaller players rather than building the new blocks. They are now forging long-term relationships and commit necessary resources to a FinTech collaboration. Traditional financial institutions have been actively trying to adopt the FinTech approach to customer experience, either by buying startups or by partnering with them. Though, the scalable and industrialized results have been limited, mainly due to finding the right partner or right approach to jointly fuel growth.

Retail banks have felt the impact from this disruption and heightened competition, with stricter regulations and sporadic economic growth adding to their challenges. However, customers don’t seem to be looking back as they embrace digital platforms, particularly early-adopter millennials[1] who came of age with digital financial products and services.

So, it’s no surprise that traditional banks are looking to develop new revenue streams, reduce costs, and meet rising customer expectations. Even though many incumbent banks are now strategically focused on innovation and agility, they are plagued by archaic legacy systems, and in-house digital innovation efforts have not been very successful.

Bank–FinTech collaboration

Source: Capgemini Financial Services Analysis, 2018, Capgemini Top-10 Technology Trends in Retail Banking: 2018

Therefore, more and more traditional banks are collaborating with FinTechs, with 91% of bank executives saying they would like to work with FinTechs, and 86% voicing concerns that a lack of collaboration could hurt business within the fast-evolving digital ecosystem. Moreover, 42% of bank executives said FinTech collaboration would help them lower their cost base. Regulations that involve customer data sharing — such as Europe’s Revised Payment Service Directive (PSD2) and Open Banking Standards in the UK — are also encouraging bank/FinTech partnerships.

Each collaboration uniquely satisfies the specific needs of its participants and is built on models that include bank acquisition, investment, or partnership with a FinTech. Engagement approaches — to suit business models and combined goals, can take the form of incubators/accelerators, hackathons, or use of application programming interfaces (APIs) to open systems to third parties.

  • Already in 2013, Citibank launched an annual four-month accelerator program and currently offers “Citi Mobile Challenge,” a “virtual” accelerator program that combines a virtual hackathon with an incubator. Mentored participants learn through virtual and on-site boot camp curriculum.[2]
  • Frankfurt, Germany-based “Main Incubator” was launched in partnership with Commerzbank in 2013. It supports FinTechs through dedicated VC funding, office space, and expert know-how.[3]
  • DCB in India is promoting financial technology through its Innovation Carnival Hackathon, in which FinTechs develop financial products and create new technologies for DCB Bank. FinTech experts and entrepreneurs mentor the participants.[4]
  • Santander, headquartered in Spain, and peer-to-peer lending marketplace, Funding Circle, have teamed up in the UK, wherein Santander refers small business customers seeking a loan to Funding Circle.[5]

It appears that collaboration is the way of the future for the financial services industry, as new technologies and standardization create a better, more integrated landscape leading to a better customer experience. Partnership that encompasses mutual business goals and leverages both entities’ strengths will ultimately provide differentiated products and services, and leverage technology for more profound consumer insights.

The industry will likely converge towards open banking and an API-based ecosystem that enables a connected network of banks and FinTechs. Although collaboration can be fraught with challenges (cultural differences, IT incompatibility or sluggish agile implementation), a commitment to mutual understanding and an enhanced customer experience will foster success. Find out more in Top-10 Trends in Retail Banking 2018, a report from Capgemini Financial Services.

The Tech Giants Growing Behind China’s Great Firewall

The Tech Giants Growing Behind China’s Great Firewall

The Chart of the Week is a weekly Visual Capitalist feature on Fridays.

Every day, your feeds are likely dominated by the latest news about Silicon Valley’s biggest tech giants.

Whether it’s Facebook’s newest algorithm changes, Amazon’s announcement to enter the healthcare market, a new acquisition by Alphabet, or the buzz about the latest iPhone – the big four tech giants in the U.S. are covered extensively by the media, and we’re all very familiar with what they do.

However, what is less commonly talked about is the alternate universe that exists on the other side of China’s Great Firewall. It’s there that four Chinese tech giants are taking advantage of a lack of foreign competition to post explosive growth numbers – some which compare favorably even to their American peers.


Like the “Bizarro Jerry” episode of Seinfeld, the Chinese-based tech giants look recognizably familiar – but markedly different – to the ones we know so well.


Likely the best known of China’s tech giants, Alibaba is the dominant online retailer in the country. The company had revenues of $25.1 billion in 2017 and is seeing that revenue grow at impressive speeds. In its most recent quarterly results (Q3, 2017), the company noted a 56% jump in revenue.

Amazon’s tough sell: Amazon does exist in the Chinese market, but it just has trouble competing with Jack Ma’s creation. Amazon has less than a 1% share of the e-commerce space in China, after a decade of trying to get a foothold. Further, Alibaba also runs AliCloud, which provides direct competition to Amazon’s AWS.


Baidu is the largest search engine in China and also a leading player in AI. It’s the most visited website in China, and ranks #4 globally. The company will announce 2017 annual results in the coming weeks, after reporting a 29% jump in revenue in Q3 2017.

Google’s searching for a way in: Google was blocked in China in 2010 after refusing to filter search requests. However, since then, the giant has been able to take very small steps in entering the Chinese market – even though its signature search engine is still blocked, Google now has at least three offices in the country.


Tencent has recently been in the news for its rapidly surging stock. The company, which owns the dominant social platform in China (WeChat), is now valued at over $500 billion. For those keeping tabs, Facebook is currently worth $550 billion.

It’s complicated: Facebook remains blocked by China, meaning that Zuckerberg and company can’t take advantage of a 1 billion plus market of people with growing buying power. Even if it found its way in, there are multiple social platforms in China and competition would be stiff.


Dubbed as “China’s Apple”, Xiaomi is one of the world’s most valuable private companies. Things have been hot and cold for the ambitious smartphone manufacturer, but recently reports have surfaced that Xiaomi will IPO in the second half of 2018 for upwards of $50 billion.

The Four New Rules of Business

Every business is different. But for all their differences, leading digital companies have some things in common that separate them from the rest. Over the five plus years I’ve been researching digital business, my colleagues and I have developed a number of frameworks to highlight these distinctions. In 2017, Ted Schadler and I worked to distill our learning even further. As a result, we revealed four rules of business which we believe will determine the success or failure of every company by 2020.

To explain our research, Ted and I recorded a complimentary Forrester webinar: “Digital Rewrites The Rules Of Business”.  In the webinar, we use the new rules of business to discuss some of the key challenges companies face when trying to digitally transform their business. Ultimately, everything starts with fully understanding your customers’ desires – and using that understanding as your north star throughout the transformation process.

In the Q&A discussion following the webinar, two main themes emerged: the role of ecosystems in digital transformation, and the extent to which digital transformation occurs.

digital business ecosystem graphicDigital business ecosystems

Business transformation is accelerated by, and built upon digital ecosystems: the customer’s personal value ecosystem, digital experience ecosystems, and digital operations ecosystems.

The customer’s personal value ecosystem is unique to each customer. It’s represented by the unique collection of digital apps each customer assembles with their smart devices. The apps they use most frequently are also the most capable of delivering an outcome of value. For example, I use my Apple TV app to navigate AppleTV because I can never keep a separate remote handy, and navigation is easier using the app because it has a voice interface – so the app saves me time. An analysis of all the apps on my phone that I most often use would reveal a great deal about my personal value ecosystem. Customers like you and me expect better digital experiences because of all the digital apps we use in our day-to-day lives.

Digital experience ecosystems help firms deliver on customers’ desires. DXEs form around specific customer needs and desires. Forrester defines the customer experience (CX) ecosystem as the web of relations among all aspects of a company — including its customers, employees, partners, and operating environment — that determine the quality of the customer experience. The DXE represents both the digital products and services that customers use to achieve their outcomes and the digital operational elements of the CX ecosystem companies use to deliver value to customers. For example, Nike+ not only allows runners to track their distance and calorie count; Nike+ is also part of a wider ecosystem of shops, social media, and even an invite-only celebrity gym that offers influencers, and active Nike+ members, the full fit-lifestyle.

While each company may assume it plays a distinctive role for their customer, from the customer’s perspective value is created when the achieve the outcome they most desire. To get there, they often require products and services from more than one company. When I Autocross my car, I not only engage in the driving experience of my car, I also need to put fuel in the car (I use an app for that), I use the Waze navigation app (even though my car has navigation built into it), I use an app for recording vehicle dynamics and another for video. While these apps are in my personal value ecosystem, they also form a broader digital experience ecosystem, working together to deliver the outcome – a great autocross day. Digital experience ecosystems constantly evolve – retail stores now offer banking services,  airlines offer cruise vacations, agri-businesses offer advice on farm management. When evolving into a digital business, you must consider markets outside of your own immediate business – because the digital leader of those markets will not only shape your customer’s expectations, they may well be competing with you very soon.

Digital operations ecosystems increase operational agility in service of customers. Behind the scenes, businesses assemble myriad capabilities to support their business model — increasingly the digital components of such business capabilities integrate the business with other companies in the market to create an operational ecosystem, with each company dependent upon others for survival. While the ultimate focus of this ecosystem is creating customer value, it’s more immediate effect is to drive operational agility in service of customers. For example, SupplyOn sits at the center of a global supply chain ecosystem, connecting the operational capabilities of thousands of manufacturers to reduce the time it takes to bring complex products to market.

The extent of digital transformation

Many people make the mistake of thinking of digital transformation as a series of projects. But true transformation is a journey, not a destination. Responding to rising customer expectations demands a state of continuous evolution. Each evolution of the experience must deliver a valuable outcome better. Done well, revenue follows. Disruptive innovation happens when a company achieves a breakthrough in delivering a specific outcome – for example when Netflix began streaming movies on-demand.  But even without disruption, there is always room for improvement, and your customers will always show you the way forward.

To succeed, digital transformation must thrive even in the far reaches of your company. You must evolve together as an organization – not just one department.

This article was originally posted on

EU to combat fake news with blockchain



The election of Donald Trump as President of the United States brought with it, amongst other things, the whole idea of ‘fake news’. POTUS is always talking about it and has done a lot to create an environment where the public now doubt whatever they read.

In the past we generally accepted that what we read in newspapers or heard on news bulletins was reasonably close to the truth, although the smart people have always been aware that every paper has a specific political agenda and that any story needs to be read with that bias in mind. But, now we have reached a stage where completely false stories are pumped out, with social media channels being the chief way of ensuring they spread like wildfire.

The European Commission (EC), according to an article published in Techcrunch, has announced that it is going to use blockchain technology in a bid to combat the spread of ‘fake news’ and its press release said it has “identified blockchain as a critical part of what it will call the Code of Practice on Disinformation, which it intends to introduce by summer 2018.”

The announcement also stated that blockchain is, “one of emerging technologies which are changing the way information is produced and disseminated, and have the potential to play a central role in tackling disinformation over the longer term.”

The EC points to the fact that DLT can aid the transparency, reliability and traceability of news on the Internet. It said:

“Innovative technologies, such as blockchain, can help preserve the integrity of content, validate the reliability of information and/or its sources, enable transparency and traceability, and promote trust in news displayed on the Internet. This could be combined with the use of trustworthy electronic identification, authentication and verified pseudonyms…”

The commission’s next step is to develop the EU-wide Code of Practice on Disinformation that will be published by July 2018.

This represents a new application of blockchain technology in a very important arena – that of the news media. We cannot underestimate the value of once again being able to know that information has been verified and sources checked. And those who claim that certain stories are ‘fake news’, as POTUS frequently does, will find it harder to do so. This could change voters’ views in elections, as well as of government policies, in the coming years. We will be able to trace the trail of truth and lies, and that will be a good thing.