A recent McKinsey article discusses the need and potential for incumbent banks on how to act vis-à-vis the pressure from new entrants in financial services. It encourages incumbent banks to leverage their edge in resources to rapidly launch their own digital business, so to disrupt the disruptors.
According to a 2017-2019 McKinsey Global Survey referenced in the same article, Banks which prioritize business building tend to considerably outperform their peers.
What does this mean for Swiss small to medium incumbent banks? What could be their strategic options for business growth? Options like M&A or a full digital transformation to its core business may be out of reach, at least for some. Through business building, however, new customers may be engaged, product and services offerings extended, and potential growth opportunities pursued. Possibilities include for example: pure-play Neo-Banks, embedded financial services with vertical offerings for e.g. housing or mobility, co-branding and eco-system services for small businesses with e.g. account-linked services.
Today, digital business building – if done with a true ‘digital mindset’ – is easier, less risky, and less costly than ever before. Incumbent banks should leverage their talent, market insight and customer proximity, and join forces with knowledgeable and experienced platform specialists and connect to ready-to-use cloud services for unmatched customer and employee experiences. This way, new business building may create fascinating new value propositions, unique to its creators and thus much more difficult to disrupt even by the most agile new market entrants. If you’re interested to learn more about the pioneers in Swiss cloud banking platform services, come talk to us.