Customer & market considerations in a symbiosis strategy designed for growth

“Innovation is the ability to see change as an opportunity – not a threat.” – Steve Jobs. In a world where technology offers seemingly endless promise, every day brings a new modern miracle. But how can banks evaluate, select, and deploy these new capabilities to gain value? By focusing on the customers and markets that the technology is designed to serve, banks can unlock the true potential of innovation and drive growth.

Consider the lending side of banking. Imagine a world where banks can seamlessly blend cutting-edge, open digital banking platforms with their existing infrastructure. Imagine deploying the latest advances alongside existing capabilities, amalgamating the best of both, offering innovative loan products, personalized to individual customers’ needs, seamlessly embedded in the journeys customers actually take regardless of channel or ecosystem. Imagine the revenue-generating possibilities if technology was truly an enabler.

Symbiosis to the rescue

Symbiosis is like upgrading your home with smart technology without needing to rewire it or dig up the foundations. It’s about integrating new digital core banking platforms with existing IT infrastructures, allowing banks to gain rapid access to the latest capabilities. Further, it provides a platform to enable the gradual transition to modern systems at a pace that matches business needs. Applying the concept of symbiosis to the lending area of retail banking presents numerous opportunities for innovation and growth. By integrating new digital lending platforms with existing systems, banks can offer more personalized and efficient lending services. This integration enables banks to leverage advanced technologies such as artificial intelligence, machine learning, and data analytics to enhance their lending capabilities. Symbiosis in lending opens a number of opportunities to generate growth, including new revenue streams, new products, and targeting new markets.

New revenue streams by getting closer to customers

Imagine a bank that knows you so well it can offer a loan tailored to your exact needs. By leveraging data analytics, banks can create personalized loan products, leading to higher customer satisfaction and increased loan uptake. This level of personalization ensures that customers receive loan offers that are most relevant to their financial situations and goals.

Picture a lender that adjusts interest rates in real-time based on your financial behavior. AI-driven pricing strategies can optimize interest rates, attracting more customers and maximizing revenue. Dynamic pricing models allow banks to be more competitive and responsive to market conditions, ultimately driving higher profitability.

Revenue generation through innovation

Tap into the eco-conscious market by offering loans for sustainable projects. Green loans can attract environmentally conscious customers and tap into the growing market for sustainable finance. These loans not only support environmental initiatives but also enhance the bank's reputation as a socially responsible institution.

Reach new customer bases by offering small, short-term loans to underserved segments. Microloans can help banks generate additional revenue and support financial inclusion. By providing financial services to those who may not have access to traditional banking products, banks can expand their customer base and foster community development.

Extend reach into new markets

Develop specialized lending products for small and medium-sized enterprises (SMEs). This can address the needs of this traditionally underserved market and drive growth. SME lending can be tailored to the unique challenges and opportunities faced by small businesses, providing them with the financial support they need to thrive.

Create innovative loan products that cater to the financial needs and preferences of younger customers. This can help banks capture a significant market segment. Youth and millennial markets are often looking for flexible and tech-savvy financial solutions, and by meeting these demands, banks can build long-term relationships with the next generation of customers.

Leveraging ecosystems

Collaborating with fintech companies can enhance banks' lending capabilities and offer innovative solutions to customers. For instance, a partnership with a fintech specializing in AI-driven credit scoring can help banks offer more accurate and fair loan assessments. Utilizing open banking APIs allows banks to integrate with third-party services, providing customers with a seamless and comprehensive financial experience.

The rise of Buy Now Pay Later (BNPL) services is a prime example of how banks can leverage ecosystems to capitalize on new opportunities. By integrating BNPL services into their existing offerings, banks can provide a convenient alternative financing option that appeals to a broad range of customers. Banks can enable BNPL services by leveraging their digital platforms, providing instant approvals and ‘loan’ servicing operations through the seamless integration into the customer’s purchase path. Further, banks can use their existing financial wellness tools to address some of the concerns surrounding BNPL. Furthermore, banks can use data analytics to offer personalized BNPL plans, optimizing repayment schedules and interest rates based on individual customer profiles. This not only enhances customer satisfaction but also maximizes revenue potential.

The future’s closer than you think

As AI systems become more autonomous, banks can develop lending products tailored to these AI entities, opening up a futuristic customer segment. Agentic AI, operating on behalf of their customers, becomes customers themselves and represents a new frontier in banking, where intelligent systems can make financial decisions and require tailored financial products.

With the rise of autonomous vehicles, banks can offer loans directly to AI-powered cars for maintenance, upgrades, and other financial needs. This innovative approach treats AI-powered vehicles as customers, creating a unique market opportunity and expanding the scope of traditional lending.

Conclusion

Symbiosis has the potential to revolutionize the lending area in retail banking. By adopting this approach, banks can drive revenue growth, launch new products, target new markets, and leverage ecosystems to stay competitive. The future of banking lies in embracing change and turning it into an opportunity. Exploring and implementing symbiosis can help banks navigate the challenges of digital transformation and achieve sustainable growth.