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Unlike some years ago, today, you will rarely find someone who does not believe in the benefits of bank digitalization and the upgrades it can bring to conventional customer experience. The so-called platformificationhas been around for a couple of years and is currently the biggest trend in the banking world. The system is built on platform models that have facilitated digital transformations across a range of industries. Despite the concept being “in”, there is still a lot of confusion coming from old-school players.
How does it improve networks?
Let’s look at the example of Netflix: you can find and stream any from a huge selection of TV shows from different providers. Platform banking follows the same concept, as it provides a whole range of third-party financial services. Clients receive larger opportunities to select from a variety of choices, because of the promotion of such ‘sharing’ nature within the digital banking network.
Different from the way social media platforms work, each time a new client joins one of the banking platforms, it does not have an impact on other clients of the network, however, the quality of experience becomes higher. Existing banks spend time and big money on attempts to network customer experience according to new models, but the attempts are mainly grounded in referral schemes with an insignificant monetary bonus. It is important, though, not to solely focus on network effects on customers. API providers come from various spheres of expertise, and as they continue to join, the platform becomes stronger and results into better offerings to clients.
The problem that was preventing the launch of platforms was the absence of necessary technology. Monolithic architecture that cannot be expanded did not allow banks to integrate APIs. The current systems were never meant or projected to be networked or platformized. Today’s technological developments ought to introduce a digital-born architecture that provides numerous benefits along with high-level security, which prevents even micro-failures. The latter implies that in case a segment of the service is damaged, the entire system continues to perform effectively, so that the bank can serve customers without interruptions.
The integration of a suitable platform allows for thousands of transactions to be processed per second, with no issues present. The most important element for such outstanding activity is the collaboration with multiple specialists that are responsible for the services they provide, and can be trusted by banks and their clients.
A new-generation symbiosis
The relationship between banks and API providers cannot be called a partnership, as it is something more. Their joint efforts allow for the creation of a stronger system that is capable of bringing banking experience to a new level. Besides, such collaboration is beneficial for both parties involved. Platforms become the space for partnerships to come into full effect and bring out the highest potential. Platformification, consequently, allows for the expansion of services, with its only limits being the imagination of API developers.
For banks alone, it would be a real challenge to keep up with all the innovative developments of the recent years, and the platformification fills the existing gaps by allowing for a symbiosis with the API provides, who are then able to reach a wider customer base. It is a B2B2C model, where every party gains benefits and strength from the relationship. Businesses can make money, while customers enjoy product offerings that empower them and allow them to manage finances in a simpler and more convenient way. The new mode of operation is a way for banks to overcome digital challenges and shift the expectations of millions in relation to what digital banking service truly is.
This is a short answer to why the platformification of banks does matter. Stay tuned for the innovations that tomorrow will bring.