The traditional notion of banking is being challenged across all fronts. Look no further than the retail space to see and understand how and why. While vying for nearly two trillion in e-commerce sales, Apple and Google both launched popular digital wallets. Meanwhile, Amazon is providing small business lending and short-term loans to resellers through Amazon Capital Services.
And that’s just the beginning. To compete in this brave new world and proactively respond to new competitive threats, incumbent banks must embrace a new and more open business model known as “banking-as-a-service” in which products and offers are assembled and aggregated from a collection of in-house and third-party-provided services. Like musicians in a finely tuned ensemble, this new approach will enable them to orchestrate and enable new ideas, partnerships and offers to meet customers’ ever-changing needs and expectations.