Technology
Vertical integration changes to reshape personal wealth

A forecast of trends influencing banking over the next 12 months cites vertically integrated business models continuing to give way to platform and marketplace-driven banking.

Infosys Finacle recently released its annual banking trends forecast for the year 2019, and it said open banking and API-led business models will play key roles globally.

"The traditional vertically-integrated pipeline business model where banks manufacture and sell their own products is giving way to specialist roles," the forecast said.

"For the longest time, it was only banks that designed and sold their own products. Then, they added complementary partner products, such as insurance, to their stable.

"The digital age brought in new non-bank players and partnerships, white labelling and co-creation. Now, as banks become open platform businesses, they are bringing non-financial offerings and competing financial products into their fold."

In Australia, open banking will especially open "windows of opportunity".

"As the traditional banking model changes to an open one, banking KPIs will need to adapt based on whether the bank is a manufacturer, distributor, marketplace or a combination of the three," the forecast said.

"In open banking, banks will acquire customers using tools and techniques that are very different from the traditional sales and marketing campaigns.

"For services such as personal financial management, measuring the number of sign-ups would no longer be adequate, but quantifying how customers benefit from the service will prove to be a more crucial measure of success and adoption of the service."

The report is based on consultation with banking experts in 100 countries, and captures 12 business and technology trends that will influence banking over the next year and beyond.

Technology trends for banking in 2019 Business trends for banking in 2019
Accelerating architectural evolution Transition towards platform business model will accelerate
AI in the bank Customer journeys will advance to the point of primary intent
Blockchain Open banking
Steady advance towards public cloud Cyber defence versus hacker intelligence
Accelerating connected commerce Optimising digital-human interplay
Increasing interactive dimensions Data privacy and ethics

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