Discover Your Path to Success: Strategies for Banks in the Shifting Financial Landscape
Banks are facing a significant challenge as customers increasingly prefer embedded channels for their basic financial needs, leading to a decline in traditional bank channel usage. To prevent customer attrition, it is crucial for banks to actively engage with customers through embedded channels. However, embedding complex products presents a greater challenge and is not easily replicated.
To navigate this shift and capitalize on the embedded finance trend, banks can adopt various distribution strategies. Firstly, a customer- or product-centric approach entails focusing on innovation and gaining a deeper understanding of customers to extend the product range and cater to a wider audience. Secondly, an enabler approach involves embracing a platform business model, selecting suitable products to embed, and forming partnerships with third-party platforms to expand offerings.
Additionally, the builder approach entails owning the platform and effectively coordinating in-house and third-party products to deliver exceptional services, albeit with significant technology investments and collaboration. Lastly, the owner orchestrator approach involves taking full ownership of the platform, orchestrating various products, and controlling customer distribution channels. This strategy may involve investing in non-financial services sectors and creating direct points of interaction with customers.
At LOQUAT Inc. we believe in the strategic alliances between banks and fintechs. By working together and successfully leveraging each other resources, two businesses will thrive in meeting and exceeding their customer expectations.