À la carte banking: FinTech’s largest threat to bank profits

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Financial services consumers are hungry, but their tastes are evolving. Feeding them the same stale bundled services will not suffice. Banks would do well to understand the ongoing “à la carte” open banking movement. Although this emerging trend poses risks to the status quo, it’s likely to create substantial opportunities for capturing market share and new revenue.

What’s driving this change?

A rare alignment of consumer, regulatory, and industry forces is facilitating a shift toward a truly open and inclusive financial system.

  • Consumers now expect a seamless and integrated experience across different financial services providers.

  • The regulatory climate in both the U.S. and Europe is favoring financial interoperability.

Increased data sharing across multiple providers should only accelerate this shift.

Why does this matter?

Banks cannot afford to lose their multiple-account, high-value customers.The improved ability to move capital among multiple providers may give consumers more control over financial matters; however, it also presents a significant threat to bank profits.

What could banks be doing?

One example: Banks can use a key asset, like consumer data, to protect and grow their revenue. In an era of open banking and data sharing, banks should explore ways of delivering personalized financial insight and learn how to tap into new revenue from a more fluid customer base.

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Julien Courbe

Julien Courbe

Financial Services Leader, PwC US

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