To deliver enhanced value to consumers and businesses, it is imperative for participants in the financial services industry to harness their distinctive capabilities and foster collaboration, ultimately offering a seamless and efficient customer experience. This collaboration can be facilitated through technological advances. But while these advances present remarkable opportunities, they also introduce risks that bear significant long-term implications for both users and the broader economy, agreed industry experts at Mexico Business Forum 2023.
This pursuit of excellence necessitates strategic partnerships and collective efforts, where each stakeholder brings forth their strengths to forge a comprehensive and integrated solution. An inter-stakeholder collaboration between traditional banks, fintech companies and government becomes particularly indispensable in a landscape characterized by market volatility and the imminent integration of emerging and disruptive technologies.
The financial services industry is witnessing the early stages of market disruption and innovation. While advancements in technology have introduced transformative possibilities, the industry is yet to fully realize its potential in terms of enhancing financial inclusion and delivering increased value to consumers and businesses, says Álvaro Cubría, Partner, McKinsey & Company. To truly champion financial inclusion, stakeholders in this sector must transcend traditional approaches and embrace novel strategies. This entails leveraging physical infrastructure and cutting-edge technologies to create an ecosystem that fosters seamless financial interactions. Moreover, it necessitates a shift in focus towards improving the customer experience, where personalized and user-friendly solutions become the norm.
Recognizing the evolving needs of the financial services industry, stakeholders are increasingly realizing the importance of collaboration and strategic partnerships. Traditional banks, fintech companies and government entities each possess unique strengths and capabilities that, when combined, can lead to the development of comprehensive and integrated solutions. By forging strategic collaborations, these stakeholders can pool their resources, expertise and technologies to address the multifaceted challenges and opportunities of the industry.
“Traditional banks bring established infrastructure, regulatory expertise and a wealth of customer data, while fintech companies offer agility, innovation and advanced technological capabilities,” says Stefan Moller, CEO and Co-Founder, Klar. Government entities provide the regulatory framework and a broader perspective on economic policies. Together, these stakeholders can co-create and implement innovative solutions that cater to the evolving needs of consumers and businesses, offering a seamless and efficient customer experience.
Through strategic partnerships, “they can leverage their collective strengths to navigate market disruptions, capitalize on emerging technologies and drive the industry forward,” says Carlos López-Moctezuma, CEO, Bancoppel. The result is an ecosystem where collaboration becomes the cornerstone of success, fostering an environment of continuous improvement, adaptability and sustainable growth.
The significance of inter-stakeholder collaboration becomes ever more salient in light of the global financial services landscape undergoing a profound transformation “driven by the convergence of market volatility and the integration of emerging and disruptive technologies,” says Luz Adriana Ramírez, Mexico Country Manager, VISA. Presently, the industry faces the challenges posed by market volatility, characterized by factors such as high inflation, market uncertainty and geopolitical tensions like the Russia-Ukraine war, as well as persistent disruptions in the global supply chain. These volatile conditions introduce uncertainty, making it imperative for stakeholders to navigate through complex economic landscapes.
Simultaneously, “the integration of emerging and disruptive technologies, such as artificial intelligence, blockchain and digital currencies, presents remarkable opportunities for innovation and efficiency,” says Matías Nuñez Castro, Head of Digital, Innovation and Remote Channels, Santander. However, harnessing the potential of these technologies while curbing their potential risks requires collective efforts from traditional banks, fintech companies and government bodies. Traditional banks can leverage their deep industry knowledge and regulatory expertise to ensure compliance and manage risk in this rapidly evolving landscape. Fintech companies, with their agility and technological prowess, can develop innovative solutions that streamline processes, enhance security and improve customer experience. Government bodies play a crucial role in establishing regulatory frameworks that foster innovation, protect consumers and support the responsible adoption of emerging technologies.
By collaboratively navigating the challenges and capitalizing on the opportunities presented by market volatility and emerging technologies, stakeholders can position themselves at the forefront of the financial services industry, adapt to changing dynamics and drive sustainable growth. An ongoing practice that reinforces this approach is the proactive evaluation of potential risks, prompting companies to ask the crucial question: “What can kill us now?” suggests Moller. This becomes especially critical given the unforeseen risks that may accompany emerging technologies like machine learning, where companies must exercise caution to avoid crossing boundaries in the use of personal user data, which is essential for building and optimizing such technologies. This ongoing conversation within the industry underscores the necessity of a risk-aware approach.
However, “risk is an inherent precondition of operating in this industry”, says Nuñez. To mitigate risks, companies must undergo important cultural changes and establish frameworks that incentivize safe and responsible innovation from within. It is in this context that collaboration becomes paramount, as each stakeholder possesses blind spots and can benefit from the perspectives and expertise of others, says Ramírez.