Interview with UpgradePack CEO, Craig Unsworth
What fintech will have the biggest impact in 2019, and why?
We’re set to see an increase in the amount of partnerships between banks and fintechs, with open banking requiring banks to open up their APIs to third party companies. In the way the last decade has seen the SaaS market reach maturity, the latter part of this one will see mass adoption of PaaS, with more banks embracing the platform-based business model in 2019 and beyond.
The platform based economy is already benefiting sectors such as retail and hospitality. And while some banks haven’t been able to adapt to the opportunities as fast as they’d like, many are now investing in platform based models. Platforms help create an ecosystem that integrates customers, partners, services and devices together, meaning all can promote the creation and exchanging of services and all parties can gain value.
What this model will bring to the industry is better product offerings for customers. With greater product choice, the power shifts to the consumer so banks and FS providers in the coming year are going to need to differentiate themselves and stay relevant in an increasingly competitive marketplace. One way for banks to differentiate in 2019 is through their reward programs. These programs are a prime example of how banks can boost customer acquisition and retention.
How can you encourage the mass adoption of Fintech?
The adoption of fintech is growing and 2018 was a big breakthrough year for the industry. Many consumers are already on board with using Fintech, a Capgemini World Fintech Report found that half of banking consumers globally were using products and services of at least one fintech firm.
However, it’s still not as easy as it should be for consumers to access fintech solutions through their banks. To encourage further adoption the CTOs and CIOs at financial institutions need to look to partnerships that act as a natural extension to their core product offering, but that also offer something sufficient that a customer would not necessarily access without their bank. This will help to increase traction they have with that customer.
In Upgrade Pack’s case this is enabled through a loyalty mechanism, through which our banking clients can provide exclusive always-discounted offers on flight and hotel upgrades to their premium account and credit card holders.
Plug and play technologies like this which do not require integration with banks’ own systems are a quicker and less-resource intensive way for banks to access, and immediately capitalise, on the latest technologies without overhauling existing systems.
Are legacy institutions agile enough to keep pace with changing demands/innovations?
Legacy IT remains a challenge for banking platforms that support a variety of payment technologies. The changing demands of customers only enhance these challenges. For example, banking solutions today need to be mobile-first to meet the growing number of mobile-centric users. Cloud based platforms are also a must for ease of integration and for helping banks scale-up. This makes it hard for some of the most established institutions that are not digitally native. Therefore, if they want to keep up with competitors in 2019 – they’re going to need to partner with third parties in order to innovate.
More traditional institutions need to outsource the heavy lifting. Pureplay technology solutions, untied to legacy systems are out there and are available, mitigating integration headaches whilst offering a platform that can scale and grow and align with the banks’ ambitions to continuously embrace new technologies. We know that for banks to have the ultimate customer retention tool, they need a system which is innovative, low maintenance, and cost effective to run.