What can banks learn from Big Tech brands?

As the lines between finance and tech continue to blur, Big Tech companies are making their presence known within banking.

What can banks learn from Big Tech?

Heightened customer expectations have beckoned Big Tech to dip their toes into the formerly distinct financial industry, and players like Google and Apple are making big moves, according to a Mambu report.

Traditional financial institutions find themselves caught in the crossfire of keeping up with the pace of change and with Big Tech’s digital-first, customer-centric services.

Coupled with fintechs and neobanks entering the space, traditional players are forced to remain competitive by expanding their digital offerings, and their overall operating models and underlying technology.

Both sides bring their unique experience to the table. Banks have built up long-standing trust and reputation, and fintechs win with their nimble and efficient approach. Both can drive the other to innovate, perhaps in collaboration with one another, to do better for their customers.

“In today’s competitive market, banks are feeling the pressure, especially as Big Tech firms like Google and Apple set high expectations for digital services and personalised offerings,” says Peter-Jan van de Venn, VP Global Digital Banking, Hexaware-Mobiquity.

“Agility is key. A modern tech setup allows for quick feature updates, but with economic uncertainty, budgets are tight. Smart spending is crucial.

Banks should use out-of-the-box solutions as much as possible, to allow more budget allocation and true differentiation. It’s not just about mimicking competition but understanding tech-savvy customers and aligning this with the brand.

In short: to succeed, banks should focus on the three C’s: understanding the Customer, who’s influenced by Big Tech, understanding the Competition, and understanding the Company, preserving the brand’s unique identity.”

BaaS and PaaS: a match made in the cloud.

According to S&P Global, the number of mentions of BaaS in earnings calls rose tenfold from 2019 to 2022. Over the same period, Google search volume for BaaS quadrupled. BaaS represents a paradigm shift in the way that banking is delivered and consumed.

However, for BaaS to enjoy wider adoption, the services customers seek from their banks must also migrate to an “as a service” model.

“This is especially true of payments,” says Vinay Prabhakar, Chief Marketing Officer, Volante. “Volante research shows that interest in Payments as a Service (PaaS) mirrors BaaS, with a remarkable 364% annual increase in the number of banks planning to work with a PaaS provider.

So, our prediction is easy: In 2024, BaaS will accelerate thee adoption of PaaS and vice versa. Within five years, “as a service” will dominate, for the benefit of customers everywhere.”

By implementing modern solutions that are decoupled with open and standardised APIs (Application Programming Interfaces), banks can seamlessly integrate with external applications and platforms.

This provides the opportunity to rapidly tap into key enterprise capabilities offered by fintech providers and expand their product and service offerings.

The “headless architecture” concept allows institutions to either reuse or select the most suitable technology stack for their digital channels which is a key differentiator for banks.