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Against a backdrop of emerging technologies, shifting customer expectations, regulatory changes and evolving business models, Forrester Research lays out the future of financial services in a provocative report entitled “Predictions 2017: Pioneering Financial Providers Will Partner With Fintech To Build Ecosystems.” It makes the claim that breakaway leaders will focus on digital products delivered as application programming interfaces (APIs), and partner with fintech organizations to create new ways to engage customers.
Indeed, the leaders recognize that nothing short of a complete digital reinvention is needed to compete and win going forward. For some this means launching more mobile payment apps than the market might need. For the pioneers, however, this means tackling more challenging customer journeys such as mortgage applications and insurance claims, and incorporate predictive analytics into more intelligent personalized product advisors.
On the emerging technology front, everyone is evaluating use cases in the application of blockchain. Forrester predicts that sentiment around blockchain will transition from “irrational exuberance to rational assessment” as the players accept that the challenges of successfully implementing blockchain applications are equal parts market structure, non-technical issues and technology.
The impact of the European Union’s Directive on Payment Systems (PSD2) cannot be understated as it will spread across the world markets as institutions and fintechs monitor the results of the unfolding opening banking initiatives and shift to embrace the API economy.
These are just some of the main points I picked up from this report. To dig deeper into these, read the full report.
So is 2017 the year of digital business reinvention for financial services where institutions partner with FinTechs in digital ecosystems that create new ways to engage customers? I think so. I can imagine ecosystems and cloud development platforms that bring financial institutions and fintechs together to deliver a range of new solutions from payments, lending, insurance claims to investment management, and more. This vision is not a distant future.
Learn more about how you can start now to capitalize on digital ecosystems and accelerate the pace of innovation for your organization.
A version of this post originally appeared on the IBM Banking blog.