VIRTUALBANKING: The Importance of Integrated Banking Systems

In this fifth core belief article, we discuss the growing importance of ecosystem synergies in the banking sector and how these collaborations between traditional banks and fintech companies are reshaping the industry to offer a more comprehensive and convenient banking experience.

Harnessing ecosystem synergies for growth

Banking ecosystems are collaborative partnerships leveraging existing technology and expertise to offer innovative solutions and services to customers. This transformative approach to banking has gained significant momentum in recent years, largely due to the emergence of fintech companies. These agile and innovative startups have played a pivotal role in driving the evolution of traditional banking models, ultimately giving rise to the development of robust digital banking ecosystems1.

The rise of fintech prompted many software and service providers to seize the opportunity and extend their reach into financing, further blurring the lines between traditional banking institutions and tech-driven solutions. With embedded finance, fintech companies can access a larger share of the customer's financial portfolioand drive customer engagement, loyalty, and, ultimately, establish sustainable revenue streams. Fintech companies are disaggregating banking products and processes like savings and lending while providing customer-oriented and targeted offerings with better servicing to both retail customers and businesses 24/7.

When banks wish to introduce new offerings, they can choose from three options:

  • Build the products in-house
  • Partner with external entities to develop products
  • Acquire existing businesses, products, or technologies

While banks have the option to build or acquire existing IT architecture to better manage risk, security, and regulatory compliance, it would not be advisable as it is time and cost-intensive. Solely relying on internal resources, banks would not be able to rapidly elevate their services. Considering all aspects, partnerships emerge as the most viable solution within a short timeframe. Therefore, banks engaging in ecosystems differentiate themselves, offering a comprehensive customer experience beyond traditional banking.

How does ecosystem synergy impact digital banking?

Ecosystem synergies empower digital banks to select and swiftly integrate best-of-suite solutions. Speed and variety are pivotal in establishing a digital bank in Singapore’s highly saturated market, where most of the population is already well-banked. Partnering with leading software and service providers aids in market growth and providing integrated offerings, essential to compete with legacy banks.

Through product and service bundling, the ecosystem approach allows digital banks to provide comprehensive offerings that complement the customer journey, increasing market share. Customers can access both financial and non-financial products on a single platform, enhancing convenience. For instance, a digital banking app can cover various aspects of a customer's life, from savings and loans to well-being, rewards, and financial education. This approach addresses the growing customer demand for convenience and a holistic banking experience.

Synpulse’s products and offerings

Synpulse supports banks and insurers throughout their value chains, from strategy development to technical implementation. An expert in digital transformation and core system implementation, Synpulse enables ecosystem synergies through partnerships and offerings.

Synpulse thrives in collaboration. It has partnered with over 100 third-party solution providers to provide the best solution tailored to client’s specifications. By leveraging on Synpulse’s domain knowledge and ecosystem expertise, clients can leverage the technology to provide innovative solutions to customers.

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