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POWER OF PLATFORM

The future of banking

Few would disagree with the premise that innovation is a constant process. The question is how does this process work? The answers lie in the twin forces of unbundling and re-bundling.


Move fast and re-bundle things - The future of banking

Few would disagree with the premise that innovation is a constant process. The question is how does this process work? The answers lie in the twin forces of unbundling and re-bundling.


 

Start-up's innovate through unbundling

New companies have innovated by unbundling the multiple product verticals that exist within a big platform. As the a16z post explains through the unbundling of Craigslist. Craigslist was created in 1995 as an online classifieds website, it soon began expanding into different areas such as cars and real estate listings. In the past decade, each of these verticals has spun new start-ups. The “job listings” section was unbundled into Upwork and Indeed. While Airbnb and Zillow unbundled the “housing” section.

New entrants are innovating against existing incumbents by unbundling the verticals.

unbundling-craigslist

Image credit: Andrew Parker as it appears in the article Platforms vs Verticals and the Next Great Unbundling | Andreessen Horowitz (a16z.com)

 

The unbundling of banking and finance by fintechs

Many new entrants in the banking and finance business are unbundling each vertical within a large bank. Fintech start-ups have spun around verticals like student debt (USA), credit (BNPL start-ups), and Investing.

Banking Vertical Unbundling

Once unbundled, fintechs’ are experimenting within their niche - to improve customer experience and revenue. And they like to experiment quickly and frequently. “move fast and break things” is a well-known motto.

 

Move fast and break things, a boon and a curse

For many years, Facebook developer’s motto was to “move fast and break things”. This helped them innovate and grow. From being a site to connect college students into verticals like mobile gaming, photo collections, shopping, and news publishing. But moving fast comes with its own pitfalls. However, this approach has the downside of losing trust. For example, Facebook has been subpoenaed by members of the American Congress recently.

In the case of fintechs, this is even more pronounced. Banking is a heavily regulated industry. Regulators grant their trust and licenses to a select few. Moving fast, while it helps innovation, can come at the expense of regulatory trust.

 

Institutions innovate through re-bundling

Unbundling is not the only force driving innovation. Re-bundling is another great way to grow a business. Microsoft is a great example of this.

Microsoft offers multiple products for enterprises - MS Windows, Office 365, Outlook, SharePoint, Teams, Power BI, Azure cloud services, and OneDrive. It has a bundle for home entertainment through the likes of Xbox consoles and Game Pass. The bundling executed by Microsoft proves that diverse users can be catered to by one institution. Each new re-bundling grows business.Microsoft Vertical Unbundling

The best of both worlds for banking institutions: Move fast and re-bundle

Banking institutions have the trust of regulators and customers. Banks can gain a further advantage by adopting the speed of fintechs, without sacrificing the trust placed in them. Banks can “move fast” and not break things. They can re-bundle.

With this strategy, banks can continue to maintain leadership - on their existing customer bases and among niches as well. Bank can continue the leadership on credit, savings products. But can also innovate for niches like teenagers or immigrants.

This needs investment in technology and partnerships that can

  Develop new products speedily - with low development costs
     
  Re-bundle and integrate with existing banking systems
     
  Configure and customize for each niche user segment

While new entrants will continue to compete, with the right technology partner, banks will continue their market leadership.

 

Fable Fintech's banking infrastructure solution

Just like Intel manufactures chips that make computers help you with running your business, playing video games with friends, or editing photos of family vacations. Fable Fintech’s technology powers the banking infrastructure. Banks can re-bundle from many many directions - cross-border payments, corporate, trade and FX transactions, trade finance, and many others.

Fable fintech helps banks move fast, safely. Banks can,

 

Launch a branded cross-border payment service in 30 days

Fable Growth Suite

     
 

Manage partners, compliance, inward and outward remittances

Fable Processing Suite

     
 

Implement a scalable and future-proof open banking solution to improve customer experience and retention

API Hub

 

Fable allows banks to 

  Move fast with our plug-and-play platforms
    Improve customer experience through easy configurations
    Reduce development time
  Be compliant with global regulatory standards
    Fable is an ISO 270001 and GDPR compliant company
    All our platforms are highly secured and compliant

 

Fable allows banks Fable Fintech has been the chosen technology partner for many reputable banks that are committed to safe innovation.

Fable Fintech Client  Banks List

Schedule a call with our experts today. 

 

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