We know… we know, the survival kit of the banking industry is a strong customer-centric platform and most banks are considering options to make customers, the undisputed king. Be it digital transformation or any optimisations in the banking industry, everything boils down to customer needs. Some common customer expectations are a personalised range of products or solutions, instant results, a trustworthy banking platform, convenience of usage, etc. But what if customers want more? How to embed multiple add-ons to banking application to cater to the increasing needs of customers?

Answer: Marketplace Integration

We are in an ‘era’ where banks are no longer just a place to invest or accumulate our earnings; it is more of a combination of different services. In the future, banks can become more of a financial e-commerce or otherwise called ‘ambient banking.’ One way banks can move towards ambient banking is by shifting to marketplace banking model. For starters, banks have to open themselves to third-party integrations with high security details and embed all the offerings on a single platform based on their customer needs.

There are several definitions or interpretations for marketplace banking. In simple words, marketplace banking means creation of a dominion in the financial industry by consolidating data-packed, targeted offerings or solutions via multiple sources. These solutions may include document validation for customer onboarding, enhanced security solutions, digital wallets, etc.

Benefits of Marketplace Integration for Banks

Opting for marketplace integration in banking can have the following advantages:

  • Faster time to market

An impressive benefit of marketplace banking is the readily available solutions or products, which eradicates the need to build one from scratch. You can choose any customisations on top of the existing product, which saves both time and effort.

  • Personalization at its best

A major reason for financial enterprises to choose marketplace banking is personalisation of products. In marketplace banking, every solution is available independently, so banks can customize their products based on their vision or their customer’s requirement.

  • More than ‘just a bank’

As mentioned before, in order for banks to become a lifestyle, they have to move away from the conventional notion of banks and start offering more. The best way to achieve this is by opting marketplace banking, which helps banks to extend their services by collaborating with different enterprises from other industries. Banks can provide services ranging from booking a movie/air ticket, online food delivery to different insurance options like automobile, travel, etc. This means that customers will spend more time on your banking application facilitating improved customer engagement.

  • More for less

A report from Everest group states that banks spend 70% of their budgets in legacy maintenance. While Fintechs and Challenger banks do not face this issue, it still costs more to build multiple solutions or products, in-house, from scratch. Hence, by opting for TPPs for products like customer authentication, credit underwriting, etc., banks can save both finance and labour costs.

  • Silver lining for traditional banks

Established traditional banks have legacy systems, which hinder the growth of banks through digital innovation. Fintechs and challenger banks, on the other hand, are taking over the finance industry with their out-of-box offerings. In order to survive against these competitors, the best bet for traditional banks is marketplace integration. Traditional banks can extend their services with a digital platform and choose different offerings available through marketplace banking.

  • Be the ultimate axis

With the help of marketplace banking, we can witness the making of ambient banking, which creates an ecosystem with banks being the ultimate centre for all customer needs. Another major advantage of banks compared to all other industry is the surfeit of data, which can help them understand unique customer needs and immediately fulfil them. As time progresses, customer loyalty increases with the increase in usage of such banking applications and the relationship becomes strong. This also can help banks in cross-selling and up-selling and put banks in an authoritative position.

How to choose a marketplace banking strategy?

A probable mistake banks do when choosing marketplace banking is an unplanned pool of collaborations with different TPPs. Banks offer too many options in their application, which can sometimes confuse customers. Also, it becomes difficult to maintain all these offerings in the initial stage, which deters the quality of the application upsetting the customers.

Hence, the best way to start is by meticulously planning a marketplace model by choosing fewer trusted partners, probably opting for a single industry, to provide fewer offerings in the beginning, etc. As and when the architecture stabilises, banks can slowly increase the offerings.

A Takeaway

After understanding the perks of marketplace integration in the banking industry, governments across the world have reformed their open banking regulations in favour of marketplace banking. This has led many financial enterprises to come out of their cocoon and fly towards ambient banking. However, there is a hearsay that the three A’s namely Amazon, Alibaba, Apple, are already acing the marketplace space. Hence, it becomes imperative to choose the right strategy and plan of action for your marketplace banking architecture. Aspire’s digital banking CX services suite is specifically designed for Banking-as-a-lifestyle with several offerings, one of which is the marketplace banking. With several personalized recommendations, our CX suite aims to provide unreal customer expectations with secured and highly resilient banking platform.

Aishwarya Iyyengar

Aishwarya was once a Quality Assurance Engineer then moved to Oracle SQL Development. But her love for writing shifted her to the world of Content Marketing and she hasn’t looked back since then. Her interest ranges from food topics to trending technologies. She loves reading books and her favourite genre is Mythological Fiction. Apart from that, she is a South Indian filter coffee lover.