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Monday, September 20, 2021

Opinion > Cloud Elements

Could the Spotify of banking be closer than we think?

Ian Currie, VP EMEA at Cloud Elements | 16:49 Thursday 17th October 2019

Spotify cracked the music market wide open because it understood exactly how people wanted to use music; what will it take for banking to do the same?.

Digitally transforming an industry means placing the customer at its centre. Think about it: where CDs merely digitised an industry, Spotify made the way in which we use music a digital experience. Spotify understood that there are different ways to listen to music for different moods and at different times of the day. 

It makes very little difference whether the focus of your business is in songs or commercial loans. A corporate banking client, for example a chief financial officer — who is used to having her personal banking needs met through a mobile banking app — will be expecting an equal, or even superior, service in her business banking. Banking services must follow an always-on approach and allow her to do exactly what she needs to whenever it’s convenient.

Focus on seamless user experience

Whether your customer is a Monzo millennial or the CFO of a multinational, it’s all about how technology can adapt to the user’s lifestyle or, better yet, how tech can enhance it. Here, the way a customer uses a banking product or service is key, so good innovation should redefine the speed at which lifestyle decisions can be made. The effect of this is that your life ultimately feels more seamless.

A seamless user experience requires a particular type of infrastructure, one that integrates the various platforms across an organisation. The problem is that API integration is often an afterthought, especially at more traditional financial services brands. Software teams operate in silos far too often and do not think about how solutions will work with other functions — many of which have been created by another software team, using different types of code or older generations of technologies.

Traditional financial service providers can take as long as a month to onboard a business customer. But how long does it take the new fintech brands? Business banking app Tide can set up a business account in a matter of minutes. Elsewhere, the ability to split a business lunch bill or allocate your quarterly expenses are great examples of how fintech is filtering out mundane day-to-day activities without us even noticing, allowing us more time to make better decisions.

It’s time to embrace the digital ecosystem — a network of business applications that speak to each other — and upgrade basic functionality to a neural network that links the various functions of your business. APIs are doorways into the data pool of an application, but it’s API integration that will speed up the retrieval of data from one pool to another, ultimately making your decision-making capabilities much faster. This means implementing an effective API integration strategy will not only support a shift in business thinking, it will also get products and solutions to market a lot quicker.

So who will get there first?

Regulation can impact timing in terms of who will bring new products to market. Currently the system favours the feisty smaller players over the bigger banks, giving them the benefit of the doubt because of the growing impact they have within consumers’ lives. 

Added to this, smaller fintech brands have the agility and the backing to make a significant dent in the banking world. But that does not mean the big banks are out of the running. Not by a longshot. In fact, the resources and talent that traditional firms have access to enhances the prospect of them adopting an innovation-led culture.

Speedily reaching new markets while understanding exactly how customers use any service — be it banking or music — and helping it fit into their lifestyle is not purely unicorn territory. By tapping into the right ecosystem, it could become anybody's game. An effective API integration strategy can set a business on the path towards this and provide the neural network to support a whole new way of doing banking.

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