Based on the combined findings, attitudes and suggestions from primary and secondary data sources, the thesis seeks a quantifiable overview of the improved value that will potentially be fostered through strategic alliances, compared to a status quo development - i.e. banking seeking to protect operational areas and compete in value-added services. Schematic 13 below illustrates the general areas where the thesis identifies value proposition improvements (interpretive) through strategic alliances. The areas are valued on a scale from 1+ to 5+, where 1+ equals small improvements compared to a status
quo environment, and 5+ equals immense improvements. It is important to stress that the thesis focuses on extra improvements through strategic alliances, as the purpose of our overall problem statement. As established earlier, new technology will evidently lead to product- and service improvements under any operational circumstances. However, as customer expectations will develop with these improvements, these do not necessarily result in higher perceived value. Thus, the thesis suggest that the best way to exceed growing customer expectations, is for businesses to leverage each other’s core competencies for mutual benefits.
Schematic 13 – Value Proposition Improvements Through Strategic Alliances
Compliance, Trust and Advisory
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Even though all industry players generally follow regulatory compliance, and collaborative efforts will therefore not result in large improvements to end-value for customers (Appendix 2, IP7); a centralization of compliance operations will streamline industry standards, and mitigate mistrust in new fintech ventures. This would contribute to solve customer job of financial security. As well, if bank licensing and deposit-guarantees are extended to fintechs, it relieves basic customers pains of risk aversion and inertia. Most important, the thesis suggests that many fintechs – based on interview attitudes – may underestimate the value of personal advisory in the future. As technology at some point might lead to a commoditization of high-value services, in-depth personal advisory – data interpretation, emotional considerations – might experience a renaissance.
Intuitive and Personalized
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The thesis suggests that the highest value proposition improvements, enabled through strategic alliances, will be within personalized solutions. As the thesis establishes that banks sit on huge client databases and account information, while fintechs are leads in utilizing data to develop personalized solutions; collaborating in this area will enable high levels of added value. In addition, a status quo development of the industry would see banks compete with managed solution providers and product leaders, but likely still deliver sub-par products. In contrast, collaborative endeavours, would lead banks to allocate capital to the most promising fintechs, accelerating innovation speed and delivery of innovative and best-in-class services.
Even as fintechs will gain access to payment and account information with PSD2; banks’ customer knowhow and comprehensive financial- and advisory expertise, can help develop products with superior advisory capacity – rooted in Big Data interpretation. As such, banking professionals can derive a qualitative dimension to the otherwise quantifiable suggestions rooted in customer data. This would result in immense improvements for the overall personalized experience for customers; helping them to solve customer jobs of VoC, relieve pains of standardization, and work as a gain creator through financial enablement.
Finally, joint efforts for personalization of communication can prove to have a huge impact on customer engagement and involvement – both entailing customer data for targeted communication, but also creating a hub for customer education and content.
Convenience and Accessibility
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Based on the findings and general attitudes in the primary data, convenience is a big concern for customers, as they expect access to services from multiple devices, easy-to-use platforms, off-line use, and intuitive interfaces. An argument can be made that new technology and the implementation of PSD2 will lead to big improvements in convenience and accessibility, no matter if collaborative structures gain traction or not. As history proves, banks have delivered big improvements in this area with the introduction of card schemes, electronic payments, net banking etc.
However, through strategic alliances, users are more likely to experience a fully integrated one-stop shop, delivering a bundle of services and integrated solutions (Appendix 2, IP2:16). Though fintechs will gain access to account information, fintechs as individual players still represent a big variation of services and solutions. As the collaborative environment will likely see banks as platforms and intermediaries, customers will gain access to a wide range of services and solutions from one outlet –
as banks’ IT-systems should allow for the seamless integration of services and solutions. This is also likely to result in the survival of only the very best value propositions. In addition, the one-stop-shop in the collaborative scenario will then also include personal expert advisory, delivered by banks. The combined effect of collaboration can potentially solve customer jobs such as personal finance control, effective, personalized saving schemes, and easy access.
Transparent and Real-time
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Although real-time user experiences in financial services and overall transparency will be a relatively big improvement for existing value propositions, the argument is that such improvements will be driven forward, even in a status quo environment, as digitalisation will enable near-instant transactions and up-to-speed visibility.
When the thesis still suggests potential improvements of value propositions in this area, through strategic alliances, it is based on the notion of fully integrated services and solutions, all built on the same digital infrastructure. This will allow for the real-time experiences - not only instant transactions, but also instant changes to spending overviews and managed solutions. Besides, the real-time experience will contribute to overall transparency. Fintechs are challenging hidden fees, which, for many years, have received criticism from customers. However, through collaboration, players can keep fees at satisfactory levels for businesses, if these are able to deliver corresponding value (Appendix 2, IP3:Q10) – solving customer pains such as non-transparency, inconceivable fees, and contribute to trust enhancement.