Why Banks Must Become Smart Aggregators in the Financial Services Digital Ecosystem

Amid accelerating digital disruption wrought by fintechs and other nonbanking rivals, financial institutions must embrace a partnership-driven and collaborative approach to remain relevant today, while evolving their capabilities to anticipate and deliver against tomorrow’s market needs.

DIGITAL BUSINESS

August 2017

2 | Why Banks Must Become Smart Aggregators in the Financial Services Digital Ecosystem

Digital Business

EXECUTIVE SUMMARY

Like musicians in a finely tuned ensemble, banks can use smart aggregation to develop a stand-out

banking experience that meets and exceeds digital consumers’ expectations. Smart aggregation will

allow banks to expand their capabilities by engaging with the highest value partners and accessing the

greatest technical capabilities.

By employing a smart aggregation strategy, banks can address three pervasive digital trends that pose

an existential threat to their future ability to compete:

• An ever-shifting consumer base, particularly millennials. At an estimated population of more

than 75 million in the U.S.,1 and two billion plus globally,

2 millennials are becoming the largest

revenue-driving demographic segment for banks over the next half century. These digital natives

favor accessibility, convenience and speed over trusted banking relationships.

• The onslaught of fintechs and nontraditional financial services providers. These organizations

are focused on addressing the shifting demands of digitally-native consumers. They are adept at

applying rapidly advancing digital technologies and benefit from a relaxed regulatory framework.

Fintechs and nonbank institutions raised $19 billion in capital between 2015 and 2016, with 90% of

the funding aimed at the highly-profitable banking segments of payments, peer-to-peer and

consumer lending and wealth management.3

• New consumer-oriented regulations. Regulatory shifts are compelling traditional banks to digitize

quickly. Governments and regulatory bodies alike are focusing on enhanced pricing transparency

and open banking standards across the globe. For example, the European Union-led Revised

Payment Services Directive (PSD2)4

and similar transparency-driven frameworks require banks to

reduce barriers to entry and make data accessible to third parties through secure application

programming interfaces (APIs).

Collectively, these factors threaten to strip banks of over $660 billion5

in profits over the next half

decade. This should be reason enough for them to embrace a smart aggregation strategy in order to

accelerate the time to market for new products and services, extend their capabilities and market

reach, and simultaneously reduce costs to develop new offers and renovate existing ones.

Very few banks have fully explored the possibilities and opportunities that smart aggregation offers.

One concern is that this approach could enable competitors to encroach upon coveted customer

relationships and substantially erode margins across services. Other concerns focus on security,

privacy and uncertainty over how to monetize and derive value from externalizing data assets.

The tide is slowly changing, however, and we’re seeing a gradual mindset shift within the industry

toward smart aggregation. Slow-moving incumbents are moving to the epicenter of digitization by

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partnering with new, nonbanking entrants to leverage and provision capabilities and data, and take

their place in the rapidly expanding open banking ecosystem.

Banks should consider the following guidelines when developing their smart aggregation strategies:

• Actively pursue and foster respectful relationships with fintechs and nonbanks. Such part-

nerships should leverage both parties’ capabilities and create a mutually beneficial digital

banking ecosystem. However, banks must also be sure to carve out their own value-add to retain

control over the customer relationship.

• Provide a reliable, trustworthy, plug-and-play platform that enables partners to co-build/

innovate and deliver consumable services. The construct is akin to Android or iOS operating

systems, which are crucial to device usage but do not provide or cater to every app or service to

fulfill user needs.

• Evaluate where their true value lies and determine how to re-channel and divide their

efforts. One approach is to increase emphasis on “slow-money” functions (involving long-

horizon assets), as “fast-money” (transactional products and services) increasingly become

commoditized.6 Doing so might entail restructuring the business to enhance the slow-money

focus on customer relationships, as well as partnering with the broader ecosystem for fast-money

offerings to meet the digital consumer’s convenience needs.

• Own the customer experience and journey by remaining at the forefront of the trust quo-

tient. Banks can do this by communicating more effectively and consistently through touchpoints.

They should also engage the ecosystem through their own infrastructure and/or act as a front-

end player to provide support for the aggregated capabilities in the ecosystem.

• Contend with profitability and insurgent banking challenges while charting their trajectory

toward a future state. Banks need to develop a holistic strategy (covering the customer, chan-

nel, product and operating strategies) that can help advance their partner ecosystem, determine

the means to monetize and deliver upon new millennial demands.

This white paper defines how banks can compete as smart aggregators, including our guiding prin-

ciples and collaborative framework for transforming into a bank of the future. Building on our

earlier work “How Banking as a Service Will Keep Banks Digitally Relevant and Growing,” we offer

banking leaders insights for the digital journey, using a well-defined, comprehensive product inno-

vation lifecycle, from innovation need and design/development, through building a go-to-market

digital roadmap.

Digital Business

| Why Banks Must Become Smart Aggregators in the Financial Services Digital Ecosystem4

A LOOK AT THE KEY TRENDS

Coming of Age of Millennials

While the baby boomer generation values a relationship-centric experience that hinges on trust and

personalization, younger generations are more interested in unlimited accessibility, convenience and

speed. This shift in consumer expectations is challenging banks to provision services similarly to how

digitally native businesses do, such as the FANG companies (Facebook, Amazon, Netflix and Google).

In a three-year study of over 10,000 millennials, 73% of respondents said they were more excited

about new financial service offerings from nonbank entrants such as Google, Apple, Facebook or

Amazon than from their own nationwide banks. Meanwhile, nearly half are counting on fintechs to

overhaul the way banks work.7 These findings reveal millennials’ predilection for the latest digital tools

and techniques to deliver the experience they expect.

The question for banks is not whether they should aggregate services but which services they should

intelligently aggregate.

Rise of Fintechs

Digital technologies are leveling the playing field and considerably reducing the traditionally high

barriers to entry into the banking industry. From rampant growth in smartphone ownership, to a tri-

pled investment in AI and machine learning to interpret behavioral data, the banking industry is being

transformed by technology.8 The continuous uptick in tech consumerization and consumption, cou-

pled with incumbent banks’ slow-moving adoption/innovation disposition, has opened the door for

insurgent fintechs and nonbanks to make forays into the banking value chain.

Approximately $78 billion has been invested in the fintech market since 2000, empowering these

companies to grab a significant share of the total banking pie ($660 billion is at risk, according to

Goldman Sachs).9 In particular, the majority of fintech attention has been laser-focused on the pay-

The Fintech Factor

LE

VE

L O

F D

ISR

UP

TIO

N

IMPACT ON BANK

Trivial Extreme Risk

Problematic

Alarm Bells

Group/back office

Businessservices & tools

Wealth and asset management

Consumer lending

Current account’s savings &personal financial management

Business lending

Payments &remittances

Figure 1

Digital Business

ments and lending segments of the value chain. Lending is of particular concern, as it accounts for

46% of global banking profit. Broader industry estimates show banks could lose 50% to 60% of their

profits in this segment over the next decade.10

A good starting point for banks approaching smart aggregation is to understand how investment/

capital allocation by fintechs threatens them across their traditional value chain (see Figure 1, previ-

ous page). As illustrated, business and consumer lending should be the banks’ biggest concern and a

major consideration as they move toward the development of a digital banking ecosystem.

QUICK TAKE

Future of Banking through an E-Tailing LensLook no further than the retail space to understand the potential impact of nonbanks entering traditional

banking. North American e-commerce sales reached $423 billion in 2016, led by three Internet technology

players: Amazon, Apple and Google.11

Both Apple and Google have launched digital payment services – Apple Pay and Google Wallet – to spear-

head their entry into e-commerce, which is not dissimilar to how many fintechs are approaching banking.

Amazon, on the other hand, has leapfrogged the payments value proposition. Since 2012, the online retail

giant has provided short-term loans to Amazon resellers through Amazon Capital Services. These loans are

offered at around 14% interest and range from $1,000 to $800,000. Approvals can be conducted in as little

as 24 hours, using the Amazon sales history of the loan requestor and a customized algorithm.12

A good starting point for banks approaching smart aggregation is to understand how investment/capital allocation by fintechs threatens them across their traditional value chain.

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| Why Banks Must Become Smart Aggregators in the Financial Services Digital Ecosystem6

Consumer-Oriented Regulations

New regulations are forcing banks to increase the transparency of customer information, improve

security and comply with changes in liquidity and capital requirements. The European Union’s open

banking initiative is causing banks to rethink their business model in order to capture new revenue

streams and fend off fintechs. At the highest level, the Revised Payment Service Directive (PSD2) is

meant to increase competition in the banking sector via the XS2A (Access to Accounts) and PISP

(Payment Initiation Services Provider) rules, which will require banks to share their clients’ account

data with third parties, starting in 2018.13

The banking industry coexists within a very strict regulatory framework, unlike insurgent players that

work under minimal constraints. Regulators globally are trying to balance the need to protect con-

sumer interests and unlock the banking capabilities that lay at the heart of competition in the data

economy. The XS2A secure API account access services are forcing banks to invest in digital security

to ensure that third parties confirm that customers have granted permission to access their data.14

Such regulations, in conjunction with an increased focus on pricing transparency and liquidity, are

pushing banks to automate key back-office and middle-office functions to reduce risk and improve

efficiency.

FIVE GUIDING PRINCIPLES FOR SMART AGGREGATION

Take a ‘Frenemies’ Approach

When considering smart aggregation partnerships with fintechs and nonbank rivals, banks should

follow the adage “keep your friends close and your enemies closer.” While new entrants pose a com-

petitive threat, partnerships between fintechs and banking incumbents still offer formidable

advantages (see Figure 2).

The Simmering Banking Aggregation Symbiosis

Paypal

MasterCard

Visa

Intuit

Oanda

Yodlee

Lending Club

** Traditional bank strength that is of interest to fintechs and new entrants

Traditional Bank Strength

EvenlyMatched

Potential Areas of Collaboration/Convergence

Capital to scale

Marketing power

Personal consumer data

Loyal customer base

Large geographic footprint

New-age distribution network

Brand

NONBANKS TRADITIONAL BANKS FINTECHS

Google

Amazon

Facebook

Apple

Alibaba

Scale

Marketing power

Access to capital & liquidity

Bank branch network

Trust advantage**

Large customer base**

Historic data assets**

Banking license

Sophisticated infrastructure

Risk, security & fraud protection**

Cutting-edge technology

Convenience

Consumer journey innovation

Lean IT

Value for money

Timely & efficient service

Personal data integration

Positive consumer experience

Figure 2

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With their large customer bases, reams of historical data, reliable infrastructure and decades spent

establishing consumer trust, banks have many competitive strengths. Banks are also experienced at

navigating a complex regulatory environment and are officially chartered to operate a financial busi-

ness. All of these capabilities make them relevant and attractive to fintechs and nonbanks seeking

partnerships.

For their part, well-funded newcomers, backed by renowned brands, offer innovation capabilities and

operate with a lean, agile IT infrastructure. Unburdened by legacy systems, this technology architec-

ture significantly enhances their time to market and ability to deliver personalized, engaging digital

consumer experiences.

A win-win for incumbents and new entrants alike is to keep pace with the demands of born-digital

consumers at a reasonable cost, which they can do by forging symbiotic partnerships through smart

aggregation. To do this, banks must first define which aggregation points/capabilities should be exter-

nalized, understand the potential value of externalization and identify the right partners to advance

this new value stream.

Agreeable aggregation points include the digital distribution networks offered by new entrants, in

return for access to the traditional banks’ large consumer base and data assets. Along the way, banks

must avoid becoming overly reliant on outsourcing innovation to their fintech partners. These organi-

zations need to strengthen their strategic alignment by prioritizing innovations that advance their

business objectives and help them retain control of customer relationships.

Banks must first define which aggregation points/capabilities should be externalized, understand the potential value of externalization and identify the right partners to advance this new value stream.An example is JPMorgan Chase, which earlier this year established a partnership with online lender

OnDeck to launch an online small-business loan platform. The partnership is expected to reduce the

loan cycle for JPMorgan Chase’s four million small business customers from weeks to a few hours or

days.15 JPMorgan Chase will retain control over the customer relationship, as these loans will be

branded by the bank, while significantly improving the product innovation lifecycle.

The same can be done by smaller community banks in the consumer lending space. Co-branded part-

nerships with fintech lenders is the optimal path to scaling new consumer loan volume and fully

supporting service delivery. For example, Titan Bank offers personal loans directly to customers

through the Lending Club platform; such co-branded consumer loan services have helped such banks

grow their loan portfolio and generate returns of 6% to 10% on P2P loan portfolios.16

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| Why Banks Must Become Smart Aggregators in the Financial Services Digital Ecosystem8

Become the ‘OS’ for Future Banking

The ultimate goal for banks is to retain their position as the trusted partner for all consumer banking

activities, even as digitization delivers holistic simplicity across the customer journey. API-led smart

aggregation can help banks achieve this goal, by establishing them as the de facto ”operating system.”

By leveraging a layer of universal APIs to collaborate with fintech and nonbank ecosystems, banks

can become a vital player by making available a licensed, regulated platform that services can be

plugged into. This will generate new revenue streams and fulfill the consumer experience, while

making new entrants reliant on banks for crucial data, processes, services and infrastructure (see

Figure 3).

Fidor Bank,17 for example, has leapfrogged its peers by putting digital technologies at the core of its

banking ecosystem. Fidor has developed its own operating system (FidorOS), which is the lifeblood

and central nervous system of the bank. Its modular banking platform enables social and real-time

functionality through open API services that enable third-party financial services providers to plug

and play (see Figure 4, next page). The platform has allowed Fidor to spawn a rich ecosystem of part-

ners, developers and white-label customers, thereby enabling the bank to anticipate customer needs

with a continuous stream of innovative products and services.

Banks’ Foundational Role in Emerging Ecosystems

Data Process Infrastructure

Services

P2P Lending E-Wallets mPOS

Social Trading

Operating System

Licensed & Regulated Back-end

Middleware Universal APIs as ConnectorOpen APIs

Banks

Aggregated Digital Ecosystem Fintech & Nonbank Providers

Figure 3

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Telefonica Germany, a provider of broadband, landline and mobile telecommunications, has partnered

with Fidor to introduce the first mobile banking app with full banking services.18 Mobile functions

include a MasterCard with a contactless function, customer identification and enrollment via video

identification, and an intuitive interface that provides a detailed overview of transactions, as well as

small instant loans and push notifications.

Re-emphasize Slow Money as Fast Money Is Commoditized

To succeed in the digital world, banks must radically reshape their business model. Historically, banks

have sought revenue growth by cross-selling services/products with the same set of customers or by

collecting interest and fees from customers. However, consumers are challenging this status quo as

they increasingly demand the same services at reduced or no fees.

By responding to these preferences, fintechs are undermining the historical banking value chain.

The resulting disintermediation is impacting fee-based revenue and causing margin erosion. Exam-

ples of such disintermediation are plentiful:

• TransferGo offers consumers cross-border payments that are 10 times less expensive19

and deliv-

ered in seconds rather than days.

• Betterment and SigFig employ robo-advisory services and other tools to dramatically reduce fee

costs to the average investor while intelligently developing a personalized investment portfolio

of funds.

How White Labeling Advances Fidor’s Customer Centricity

Banking Made Possible via Fidor White Labeling

Core Core Banking System Core Banking System

Operating System Operating System

(e.g., MQSeries)

Community Payments Banking

FidorOS

OptionalCore Modules

Payments Banking

Product FeaturesBlog P2P A2A P2P A2A

Web Front End Web Front End Web Interface

Mobile Apps

Interface to the Core

Bank 1 Bank 2

(e.g., MQSeries)

A2A (Account to Account) P2P (Peer to Peer)

Figure 4

| Why Banks Must Become Smart Aggregators in the Financial Services Digital Ecosystem10

• Instant service segments, such as payments, remittance transactions and other transaction-based

products and services,20 are under threat of commoditization from new entrants offering innova-

tive, convenience-driven products. Some experts estimate this will result in a double-digit decrease

in U.S. banks’ fee margins for consumer finance, payments and asset/wealth management.21

To thwart disintermediation in these fast-money segments, banks should identify smart aggregation

capabilities that can be externalized through partnerships with fintechs and nonbanks. Doing so would

help banks remain relevant by delivering a complete digital experience and meeting consumer demand

at reduced costs while still retaining a share of the revenue from such services.

Banks should focus their move-forward strategies on maximizing slow-money segments, such as cap-

ital/asset management, investor portfolio management, etc., where they already have an historical

advantage. Incumbent banks with these competencies should reaffirm their core capabilities and ser-

vices in these areas by injecting robotics and/or platform-powered automation into core banking

processes and readjusting their strategic advantage as market conditions dictate.

By taking this two-pronged approach, banks can re-center their operating model and serve as a forcing

function to reconfigure core in-house services. It will also allow them to maintain control of end-to-end

customer lifecycle management for their most valuable segment, and provide them with a golden

opportunity to get ahead of the digital competition, further their customer reach and address demand.

Own the Customer Experience and Journey

To maintain a central role in the banking ecosystem, incumbents must truly prioritize the digital con-

sumer and preserve ownership of the customer journey. Recent research reveals that for businesses

across industries, just a 10 point increase in customer satisfaction can increase revenues by 2% to 3%.22

To accomplish this, banks must shift from product to customer centricity. This can be done by taking

three actions:

• Establish a model of consumer engagement throughout the discovery and awareness segments

of the customer journey. This will require banks to break down internal barriers between business

functions and drive partnerships with fintechs and others with which they could share information

and analytical insights, as well as promote new value streams.

• Develop an externalized API layer, wrapped around the banks’ core assets to allow for the inte-

gration of smart data-driven capabilities with outside providers. By doing so, banks can deliver a

Banks should focus their move-forward strategies on maximizing slow-money segments, such as capital/asset management and investor portfolio management, where they already have an historical advantage.

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personalized consumer journey outside their own core banking systems and provide the much

desired added value to today’s digital customer.

• Enable delivery of unparalleled customer service support across the entire customer journey.

According to one study, for example, 78% of millennial consumers expect a customer service

agent to know their contact, product information and service history when they contact a brand

for assisted service.23 With their massive datasets and analytics-driven customer service, banks

must play to their strengths by provisioning this service across multiple touchpoints.

Case in point, we enabled an omnichannel account opening service for a large UK bank via the devel-

opment of a mobile iOS interface with a customer support service model that provides retail banking

functionality on digital devices (iPad and iPhone). This allowed the bank’s staff to assist with the open-

ing of accounts, both online and offline, by asking customers to validate data via a digital signature.

This capability delivered the convenience sought by millennial customers, as it effectively reduced the

average time taken to open an account by 75%, from four days to one day, and resulted in a net

increase of 50-plus account openings per week.

Figure 5 illustrates how banks can leverage their vast data assets, smart integration competencies

and superior customer support to remain relevant in the consumer journey in a connected, digital

ecosystem.

Digital Consistency Across Channels

Bank services provided on digital channels Servicing multiple customer journey touchpointsleveraging the partner ecosystem

MobileApps

Products &Services

IoTWearables

Customer Database/CRM

Compliance KYC Data

BI & Analytics Data

Process (e.g., e-wallet)

Fintech Partners

OmnichannelAwareness

Convenience at Point of Purchase

Cross-Sell/Upsell

Customer Loyalty &Retention

Personalized Experience & Discovery

Bank Accounts

Customer Support Service

CustomerTouchpoints

Social NetworkPartners

Figure 5

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| Why Banks Must Become Smart Aggregators in the Financial Services Digital Ecosystem12

Become the Bank of the Future

To become a bank of the future, incumbent banks need to evolve through an API-led open banking

program and regain a central role in the democratized digital ecosystem. Banks must function as plug-

and-play aggregators addressing a plethora of strategic collaborative functions, effectively becoming

a distributor of services by enabling the consumer base to access products from fintech partners, or

acting as an orchestrator that offers banking-as-a-platform services to a variety of players in the eco-

system.

Figure 6 illustrates the collaborative framework that we believe will underlie the bank of the future.

This democratized ecosystem will provide the platform with open APIs, through which fintechs and

nonbanks will plug into the banking infrastructure and capabilities as part of a new operating model.

Major banks worldwide have pursued a transformation strategy by doing the following:

• Engineering personalized customer journeys as digitization leads to truly personalized,

enriched, holistic end-to end-services. Wells Fargo has moved forward with secure API external-

ization to transfer customer data into Intuit programs, including QuickBooks, Mint and TurboTax,

to improve convenience for its account holders.24

• Facilitating instant services and reducing time to market. Canada’s Scotiabank has partnered

with Chase on payment technology APIs in merchant services to reduce the time it takes for funds

settlement. This is a must for banks as fee erosion continues.

The Open Banking Ecosystem: The Future State

APPLIED BANKING PLATFORM

Products & Assets

DIGITAL PLATFORM – OMNICHANNEL DISTRIBUTION

Customer interface & delivery

Co-branding & marketing

Omnichannel Infrastructure (marketplace, apps, etc.)

Acc

ou

nts

Lo

an

Mo

rtg

age

Lea

sin

g

Fact

ori

ng

Lo

yalt

y

Car

ds

Reg

ula

tory

Co

mp

lian

ce

SYSTEM OF RECORD & LICENSE (CORE BANKING)

Process Platforms

DIGITAL PLATFORM (DATA & ANALYTICS)

Fraud monitoring

Predictive analytics

Business intelligence & data insights

Performance management

Transactions & payments

Servicing (loan,

underwriting, credit

qualification & trading)

AML/ KYC

Document management

Hosting & networking Core IT management services

Securityservices

Innovationmanagement

NONBANKENTRANTS FINTECHS

WEALTH MANAGEMENT

INVESTMENT & TRADING

PAYMENTS

REMITTANCE & FOREIGN EXCHANGE

LOANS & MORTGAGES Alibaba

Amazon

Apple

Facebook

Google

Samsung

Kabbage

Kreditech

Lending Club

LendingTree

OnDeck Capital

Quicken Loans

SoFi

eToro

Motif

Oanda

Stockspot

Tradier

Dwolla

PayPal

Square

Venmo

Kantox

TransferWise

WorldRemit

Betterment

Intuit

Nutmeg

WealthFront

Mobile Apps Social Networks

IoT Wearables Internet

Figure 6

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Banks must function as plug-and-play aggregators addressing a plethora of strategic collaborative functions, effectively acting as a distributor of services or as an orchestrator that offers banking-as-a-platform services to a variety of players in the ecosystem.

Digital Business

| Why Banks Must Become Smart Aggregators in the Financial Services Digital Ecosystem14

• Evolving into a lean operator of digital services. To cost-effectively improve their outreach in

highly competitive digital segments such as consumer lending, banks are seeking strategic alli-

ances with new entrants. For example, Santander partners with Kabbage in the EU and UK to use

its platform for SME lending; conversely, Lending Club is using Citibank NA’s credit facility to

finance loans that qualify under the Community Reinvestment Act.

• Creating platform-based marketplace for products and services to advance collaboration and

revenue generation. This will force banks to open their data assets and customer-related informa-

tion to third parties. As digital API offerings mature, banks such as BBVA, N26 and Fidor in

particular will offer a complete set of white-labeled software-as-a-service solutions for digital

banking.

The evolution into a bank of the future will not be quick or easy; it will require banks to externalize

services and aggregate capabilities with new entrants. It will also necessitate vast cultural change.

(For more on the changes required, please read our white paper “How Digital 2.0 Is Driving Banking’s

Next Wave of Change.”)

LOOKING FORWARD

The digital disruption caused by new entrants will not disappear. And the low interest rates that have

persisted over the last few years are likely to remain for the foreseeable future. These external macro

forces, along with new regulations that strive for new levels of transparency, will continue to drive

banks toward the digital frontier and partake in an enriched democratized ecosystem built around

collaboration and smart aggregation.

The task at hand calls for major transformation for incumbent banks if they truly want to become the

digital OS of the banking ecosystem. Banks must begin now to identify capabilities that are ripe for

open banking, identify business-driven use cases that justify externalization, develop the technology

and operating model for implementation, and most importantly, select partners to collaboratively

enrich the digital banking ecosystem.

We firmly believe that traditional banks are well positioned to succeed in the digital banking future if

they take the right actions now – and establish themselves once again as the most important piece of

the financial services puzzle.

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FOOTNOTES

1 Richard Fry, “Millennials Overtake Baby Boomers as America’s Largest Generation,” Pew Research Center, April 25, 2016,

http://www.pewresearch.org/fact-tank/2016/04/25/millennials-overtake-baby-boomers/.

2 Ari Sillman, Courtney Rickert McCaffery and Erik R. Petersen, “Where Are the Global Millennials?” ATKearney, http://www.

atkearney.co.uk/paper/-/asset_publisher/dVxv4Hz2h8bS/content/id/8693136.

3 Elena Mesropyan, “Global Fintech Funding Reached $36 Billion in 2016 with Payments Companies Securing 40% of Total

Funds,” LTP, Jan. 2, 2017, https://letstalkpayments.com/global-fintech-funding-36-bn-2016/.

4 Peter-Jan Van De Venn, “The Impact of PSD2 on API Banking,” BBA, Nov. 30, 2016, https://www.bba.org.uk/news/insight/the-

impact-of-psd2-on-api-banking/#.WQkImM_yvDc.

5 “2016 Top Market Report: Financial Technology,” International Trade Administration, 2016, http://trade.gov/topmarkets/pdf/

Financial_Technology_Executive_Summary.pdf.

6 “The Future of Money,” Cognizant Technology Solutions, 2017, https://www.cognizant.com/whitepapers/the-future-of-money-

codex2547.pdf.

7 “The Millennial Disruption Index,” Viacom Media Networks, 2013, http://www.millennialdisruptionindex.com/wp-content/

uploads/2014/02/MDI_Final.pdf.

8 Andrew Burger, “Pew: U.S. Smartphone Ownership, Broadband Penetration Reached Record Levels in 2016,” Telecompetitor,

Jan. 13, 2017, http://www.telecompetitor.com/pew-u-s-smartphone-ownership-broadband-penetration-reached-record-lev-

els-in-2016/, and James McCormick, “Predictions 2017: AI Will Drive the Insights Revolution,” Forrester Research, Nov. 2, 2016,

https://go.forrester.com/wp-content/uploads/Forrester_Predictions_2017_-Artificial_Intelligence_Will_Drive_The_Insights_

Revolution.pdf.

9 “2016 Top Markets Report: Financial Technology,” International Trade Administration, http://www.trade.gov/topmarkets/pdf/

Financial_Technology_Executive_Summary.pdf.

10 “Fintechs Might Be Corporate Banks’ Best ‘Frenemies,’” BCG Perspectives, July 5, 2016, https://www.bcgperspectives.com/

content/articles/financial-institutions-technology-digital-fintechs-may-be-corporate-banks-best-frenemies/.

11 “Worldwide Retail Ecommerce Sales Will Reach $1.915 Trillion this Year,” eMarketer, Aug. 22, 2016, https://www.emarketer.

com/Article/Worldwide-Retail-Ecommerce-Sales-Will-Reach-1915-trillion-This-Year/1014369.

12 Alistair Barr, “Amazon Lending: Company Offering Loans to Its Online Sellers,” Huffington Post, Sept. 29, 2012, http://www.

huffingtonpost.com/2012/09/28/amazon-lending-company-no_n_1923148.html%20-%20September%202012.

13 Peter-Jan Van De Venn, “The Impact of PSD2 of API Banking,” BBA, https://www.bba.org.uk/news/insight/the-impact-of-psd2-

on-api-banking/#.WQkImM_yvDc.

14 “PSD2 and XS2A: Regulation or Opportunity?” FIS and Finextra, May 2015, https://www.fisglobal.com/-/media/FISGlobal/

Files/Report/PSD2-and-XS2A-Survey.pdf.

15 Kevin Wack, “Chase Quietly Launches Its Online Small-Business Loan Platform,” American Banker, April 12, 2016,

https://www.americanbanker.com/news/chase-quietly-launches-its-online-small-business-loan-platform.

16 “The Latest on Banking and Peer-to-Peer Lending,” Synergy Partners, 2013, http://www.synergypartners.com/news/latest-

banking-peer-peer-lending.

17 Fidor website: https://www.fidor.com/.

18 “Telefonica Germany Launches Fidor-Backed Mobile Banking Service,” Finextra, July 25, 2016, https://www.finextra.com/

newsarticle/29221/telefonica-germany-launches-fidor-backed-mobile-banking-service.

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| Why Banks Must Become Smart Aggregators in the Financial Services Digital Ecosystem16

19 Vaida Saltenyte, “TransferGo Allows Migrants to Send Money Home 10X Cheaper and Faster,” 150sec.com, Jan. 20, 2016,

http://150sec.com/transfergo-allows-migrants-to-send-money-home-10x-cheaper-and-faster/.

20 “The Future of Money,” Cognizant Technology Solutions, 2017, https://www.cognizant.com/whitepapers/the-future-of-money-

codex2547.pdf.

21 Denis Bugrov, Miklos Dietz and Thomas Poppensieker, “A Brave New World for Global Banking,” McKinsey & Co., January 2017,

http://www.mckinsey.com/industries/financial-services/our-insights/a-brave-new-world-for-global-banking.

22 Alex Rawson, Ewan Duncan and Conor Jones, “The Truth about Customer Experience,” Harvard Business Review, September

2013, https://hbr.org/2013/09/the-truth-about-customer-experience.

23 “2016 State of Global Customer Service Report,” Microsoft Corp., 2016, http://info.microsoft.com/rs/157-GQE-382/images/

dynamics365-en-global-state-customer-service.pdf.

24 Penny Crosman, “Wells-Finicity Deal Furthers Data Détente,” American Banker, April 4, 2017, https://www.americanbanker.

com/news/wells-finicity-deal-furthers-data-detente.

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ABOUT THE AUTHORS

Philippe Dintrans is a Senior Vice-President and Global Leader

of Cognizant Business Consulting’s Banking and Financial

Services Practice, where he is Chief Digital Officer. Philippe

has led numerous consulting engagements covering business

transformation, IT transformation and change management for

marquee Cognizant clients. He holds a master’s of science degree

in engineering from the Massachusetts Institute of Technology

(MIT) and an MBA from INSEAD. Philippe can be reached at

Philippe.Dintrans@cognizant.com.

Philippe DintransSVP and Global Consulting Leader of Cognizant Business Consulting’s Banking and Financial Services Practice

Madhusudan Ponnuveetil is a Director and Principal with Cognizant

Business Consulting’s Banking and Financial Services Practice.

He has more than 12 years of experience leading large operating

model innovations, performance improvement and change man-

agement initiatives. Madhu holds an MBA from Asian Institute of

Management, Philippines, and a bachelor’s degree in engineering

from MSRIT, India. He can be reached at Madhusudan.Ponnu-

veetil@cognizant.com.

Madhusudan Ponnuveetil Director and Principal, Cognizant Business Consulting’s Banking and Financial Services Practice

Amit Anand is an Assistant Vice-President within Cognizant Busi-

ness Consulting’s Banking and Financial Services Practice. He has

15 years of experience successfully leading and managing large

business/IT transformation, operating model and digital initiatives

for various clients. Amit holds a bachelor’s degree from the IIT

Delhi and an MBA from the Indian School of Business, Hyderabad.

Amit can be reached at Amit.Anand@cognizant.com.

Amit AnandAVP with Cognizant Business Consulting’s Banking and Financial Services Practice

19Why Banks Must Become Smart Aggregators in the Financial Services Digital Ecosystem |

Digital Business

Ardhendu Acharya is a Consulting Manager with Cognizant

Business Consulting’s Banking and Financial Services Practice.

He has more than 10 years of experience managing consulting

engagements across key digital initiatives such as open APIs,

focusing on externalization and monetization strategy, design

and implementation of an API factory model blueprint, business-

driven IT strategy and cost optimization initiatives. Ardhendu

holds an MBA in advanced strategy from the Rotterdam School

of Management, Erasmus University, the Netherlands, and a

bachelor’s degree from Anna University, India. He can be reached

at Ardhendu.Acharya@cognizant.com. Ardhendu Acharya Consulting Manager with Cognizant Business Consulting’s Banking and Financial Services Practice

Adam Chardukian is a Senior Consultant with Cognizant Business

Consulting’s Banking and Financial Services Practice. He has more

than seven years of experience executing consulting engagements

around target operating model design, financial analysis, Lean/

Six Sigma implementation and business development/product

management. Adam holds an international MBA and a bachelor’s

degree in corporate finance and global supply chain and opera-

tions management from the University of South Carolina. He can

be reached at Adam.Chardukian@cognizant.com.

Adam Chardukian Senior Consultant with Cognizant Business Consulting’s Banking and Financial Services Practice

© Copyright 2017, Cognizant. All rights reserved. No part of this document may be reproduced, stored in a retrieval system, transmitted in any form or by any means,electronic, mechanical, photocopying, recording, or otherwise, without the express written permission from Cognizant. The information contained herein is subject to change without notice. All other trademarks mentioned herein are the property of their respective owners.

TL Codex 2866

ABOUT COGNIZANT BUSINESS CONSULTING

With over 5,500 consultants worldwide, Cognizant Business Consulting offers high-value digital business and IT consulting services that improve business performance and operational productivity while lowering operational costs. Clients leverage our deep industry experience, strategy and transformation capabilities, and analytical insights to help improve productivity, drive business transformation and increase shareholder value across the enterprise. To learn more, please visit www.cognizant.com/consulting or e-mail us at inquiry@cognizant .com.

ABOUT COGNIZANT BANKING AND FINANCIAL SERVICES

Cognizant’s Banking and Financial Services Practice, which includes consumer lending, commercial finance, leasing insurance, cards, pay-ments, banking, investment banking, wealth management and transaction processing, is the company’s largest industry segment, serving leading financial institutions in North America, Europe, and Asia-Pacific. These include six out of the top 10 North American financial insti-tutions and nine out of the top 10 European banks. The practice leverages its deep domain and consulting expertise to provide solutions across the entire financial services spectrum, and enables our clients to manage business transformation challenges, drive revenue and cost optimization, create new capabilities, mitigate risks, comply with regulations, capitalize on new business opportunities, and drive efficiency, effectiveness, innovation and virtualization. For more, please visit www.cognizant.com/banking-financial-services.

ABOUT COGNIZANT

Cognizant (NASDAQ-100: CTSH) is one of the world’s leading professional services companies, transforming clients’ business, operating and technology models for the digital era. Our unique industry-based, consultative approach helps clients envision, build and run more innova-tive and efficient businesses. Headquartered in the U.S., Cognizant is ranked 205 on the Fortune 500 and is consistently listed among the most admired companies in the world. Learn how Cognizant helps clients lead with digital at www.cognizant.com or follow us @Cognizant.

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