Peter Wannemacher, Senior Analyst

Show notes:

Banks today have a simple but hard choice: Excel at open banking to lead and participate in a rapidly evolving ecosystem, or become an efficient financial platform. There’s one more option worth mentioning — become an unintentional financial utility.

The once powerful business model of retail banks is now delicate and unstable. This model is based on and depends on customers maintaining long-term relationships with their banks and working with them across life events; it assumes low churn and consistent enrichment. Customer dynamics, new competitive forces, and regulatory changes are fracturing this model.

This fracturing is not one large crack but rather persistent erosion that can remain hidden (customers are not churning at an eye-opening pace) but will ultimately shake the foundation of the model.

The question is: How do banks respond — how do they leverage strengths such as scale, operational excellence, and a treasure trove of customer and transactional data to thrive in a new banking environment?

In this episode, Peter Wannemacher discusses the challenges facing banks and the actions they can take to strengthen their portfolio of experiences and create systems of exploration for innovation or M&A efforts. The banking model may be fracturing, but that opens new possibilities for everyone. The choice lies at this basic fork in the road: Do banks embrace or fight change?