Disrupt or be disrupted. Attempts to create new, viable business models for the digital age will flounder unless people and organisations are willing

Retail Financial Services

John Hall

Bank and Brand Distribution of Retail Financial ServicesRetail Financial Services

In financial services we are at the precipice of possibly the biggest revolution with the potential that open banking brings. No longer do the incumbents hold all the cards - figuratively and literally - you either embrace the change or deal with the consequences.


In financial services we are at the precipice of possibly the biggest revolution with the potential that open banking brings.  No longer do the incumbents hold all the cards -figuratively and literally - you either embrace the change or deal with the consequences.

  • More bank branches are closing than ever before (circa 60 every month). A ‘Which’ report found 2868 branches closed between 2015 and 2018 with the number accelerating.
  • Technology is faster, cheaper and exponentially so year on year.
  • Speed is of the essence with consumer expectations constantly rising – as a result of other industries offering on-demand services (Spotify, Amazon, Netflix)
  • Other industries have been disrupted and on occasion killed the traditional players (think OF Netflix v Blockbuster, or Kodak’s downfall, and most lately in retail with House of Fraser, and DFS announcing profit warnings this morning).

 Now is the time for financial services to disrupt or be disrupted.


Key Themes

Collaboration between incumbent banks and fintechs is increasing rapidly. A report by EY earlier this year, Unleashing the Potential of Fintech in Banking, highlighted that collaborating, instead of competing, with start-ups can provide fresh tech solutions for banks. Shared services and knowledge will improve product offerings through data analytics tools like predictive analytics, offering deeper engagements with customers.

Both parties have something the other parties crave:

In essence:

  1. Banks – customers, budgets, ‘trust’
  2. FinTechs – tech, innovation, speed

 At Bud (a 3-year-old tech platform which provides an intelligent financial marketplace, distributed in traditional banking apps,) they have partnered with the likes of HSBC.

Using the bank distribution network (their app) and customer base, the platform allows users to connect all their bank accounts and credit cards (HSBC and others). Bud provides user analytics from the aggregated spend and uses that insight to connects users with relevant products and services through the Bud marketplace. All within the bank branded app.  This creates a new revenue stream for the bank (through commission on 3rd party sales,) and a deeper understanding of their customers, allowing them to serve them better in the long run.

This win-win model helps to grow the network.

  • Bank – time and attention of customers (existing and new), create more loyalty, new revenue
  • Fintechs – distribution and credibility via bank app, acquisition
  • User – right product at the right time – no longer go and compare, the solution comes to you

 Bud is constantly asked why the bank would not do this themselves; there are many answers, amongst them:

  • Legacy tech
  • Bureaucratic approval processes through corporate governance
  • Other priorities
  • Not their key business…etc

 All are correct, so the answer to collaborate with a specialist in the area. “Focus on your USPs and API everything else”

 The Solution

Bringing the right parties to the table to solve a common goal should ensure the right level of buy-in from all people especially with a win-win model.

Various options can apply here:

  • Build – best when the future model isn’t that much different to the current model and where current experience will apply. (Banks are building innovative solutions to compete with the likes of Monzo & Starling; ING – Yolt, RBS – Bo, Goldman Sachs – Marcus etc.)
  • Buy – when the ability to shift is not enough and where outside talent may significantly improve speed to market. (Experian bought ClearScore for £275m after 3 years.)
  • Partner – when the cost of building or buying may be prohibitive and the benefits of learning alternative options is great. (HSBC & Bud.)
  • Invest – where there is a desire to leave an outside partner’s model intact, usually to avoid hindering entrepreneurial dynamics. (Santander & Curve (one card for all your wallet). BBVA – Atom Bank.)
  • Incubate – when the synergies of outside organisations or people are better achieved in an accelerator environment. (All consultancies offer these – Bud in Accenture accelerator.)

 Depending on the circumstances a company can go through all these options or none of them.



Collaboration is key. Allow both businesses to focus on what they do best and utilise the other for what they are best at. Meeting in the middle is where the difficulty lies, ensuring the working practices of both teams’ work, the cultures don’t clash and the benefit for the customer is kept front and centre.