3. Disruption and Consumerization of Banking Services Traditional financial institutions are under increasing pressure from new competitors — fintech players, peer-to-peer lenders, new
types of digital payment methods and even crypto currencies — startups born in all-digital environment and unburdened by legacy
delivery models. Cognizant says financial institutions have taken a conservative and predictable approach in their defense against
customer attrition: they’ve banked on inertia and the relative difficulty of switching providers… just as they’ve always done.
Waking up to the threat from outsiders that are disrupting the industry, Cognizant says financial institutions are finally starting to
fight back with digital, mobile and other tech-centric strategies. Banking providers are starting to accept that their brands actually
can be displaced by more innovative, nimble and quick competitors, so they are employing strategies that look and feel a lot more
like those used in other industries (e.g., retailing).
WAYS THE TRADITIONAL INSTITUTIONS ARE RESPONDING TO THE DIGITAL BANKING MANDATE 1.
Basic Core Infrastructure. The simple implementation of an effective digital interface between legacy systems and digital
consumers.
2.
True Digital Backbone. Implementing a natively-digital platform that integrates all touchpoints — from the front to the
back office, across all channels.
3.
Digital Partnerships. Digital partners are established under the bank’s brand to provide digital services that might
otherwise disintermediate the organization.
4.
Open Architecture. In this state, is not necessary, at least from the onset of a initial relationship, for a consumer to
acknowledge the institution from which the services are being provided. Consumers choose not only the access method but the
entire approach to their interaction.
