What European Banks Need to Know about Competing with Ecosystems

By Alessandro Secchi, Luca Gagliardi and Nanna Svahn

Partnering with diverse groups of companies is proving to be a rewarding way to attract new customers and expand existing relationships. But managing these networks is a relatively new area for most banks, especially in Europe. A replicable operating model will help.


Banks are increasingly turning to new and diverse partnerships to spark growth – for good reason. Ecosystems that offer complementary products and services via a single platform can open new revenue streams for all companies involved. In most cases, banks will receive fees in exchange for allowing its partners access to their customer database. In some cases, banks suddenly find themselves able to follow customers far beyond the boundaries of their traditional relationships.

Take the DBS Property Marketplace in Singapore, for example, in which the Singapore-based bank (DBS) works with partners including EdgeProp, Averspace, and SoReal to pool offers onto the platform.1 Launched in 2018 by DBS, this ecosystem enables customers to buy, sell, or rent a home from a single platform – and take out a loan in the process. Among other returns, this ecosystem generated more than SGD 300 million in home loan requests for DBS in its first year of operation.2

Other growing bank-based ecosystems are focusing on different core customer interests, such as wellness and travel. The big challenge is managing an ecosystem over timewhile also launching and managing others successfully. Eighty-nine percent of the 120 bank leaders we recently surveyed (with banks located in 19 countries across the globe) said they believe that ecosystem-based initiatives will be their main driver of future value creation. Among leaders of banks in Europe the response was almost identical, at 88 percent. Yet orchestrating even a single ecosystem is relatively new territory for most banks. And in Europe, the challenge is exacerbated as many firms are still struggling to pull outdated legacy systems fully into the digital world.

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Our research, bolstered by interviews with experts on ecosystem strategy and development, suggests that adopting a replicable operating model at the outset would help most banks orchestrate their first ecosystem with confidence. It would also sustain them as they expand their ecosystem portfolio, saving them from redundant learning curves.

Complex partnerships will always evolve, with partners coming and going, strategy shifting, and new innovations rising. Gathering best practices, in the form of an operating model, will benefit all ecosystem endeavours.

And, by providing guidelines and guardrails up front, it would address our respondents’ most consistent ecosystem concerns, such as developing strong technology platforms, maintaining data security, and ensuring a consistent brand customer experience.

Even banks that are already orchestrating multiple ecosystems can benefit from reverse- engineering a standard operating model across ventures. Complex partnerships will always evolve, with partners coming and going, strategy shifting, and new innovations rising. Gathering best practices, in the form of an operating model, will benefit all ecosystem endeavours.


Foundations of a strong operating model

What behaviours anchor a strong and replicable operating model? We found several that we could classify as “the basics” (establishing key performance indicators and measuring and monitoring progress, for example, or using intelligent marketing tools to turn data into insights). But we also found five that were less intuitive, namely:


1. Differentiate between strategic and tactical ecosystem partners.

Contractual partnerships generally ensure the flexibility that’s needed to operate in an ever-changing ecosystem, no matter the type of partner. However, since not all partners can offer the same value, standardising agreements with small partners will make partner management easier. Some ecosystems may end up managing hundreds of such partners if the market in which they’re operating is highly fragmented. In the housing market, for example, a bank might find itself managing relationships with dozens of real estate agents, legal services firms, and moving companies.

Strategic partners call for a more tailored approach, with dedicated staff and contractual terms specifically designed to ensure the health and longevity of the partnership. One bank we studied has a dedicated team to manage 20 strategic partners and another dedicated team responsible for more than 100 tactical partners.

Remuneration models should be similarly sorted, based on the type of ecosystem and the role of the partner. It might be a percentage of the transaction value, a flat fee, or a combination of both. Remuneration might also take the form of data exchange; aggregating customer data from different touch points can help the bank provide a better customer experience and simultaneously draw a customer deeper into the ecosystem.


2. Put onboarding on the fast track.

After the contract, onboarding is the next critical element that can enhance the value of a partnership (or damage it). Lacking a standardised and agile process, onboarding can take more than six months, as the agreements make their way through different layers of IT, legal, and compliance approvals. Banks need to accelerate this process, to ensure that all parties are able to take full advantage of the market conditions that are bringing them together. They should also put limits on the length of time allowed for onboarding tactical partners. One bank we interviewed does not proceed with a partnership if it takes more than six months to onboard the partners because integration costs start to erode value that the ecosystem can generate.

Providing APIs can be a way to reduce integration costs and time to market. One bank that we studied, in the Asia Pacific region, launched a partner portal to provide access to its private API system, and quickly found it to be the fastest and easiest way to connect partners securely with the bank. The portal standardises partner interactions, minimising the need for discretionary judgement calls. Partners are encouraged but not required to use the portal; almost 80 percent do, however, and they benefit from a streamlined onboarding process. The partner portal has also helped the bank improve control of its ecosystems in their early development phase as they can track API usage.


3. Nurture the partner community to sustain innovation.

In a strong banking ecosystem, value is created through interactions with the orchestrator. Partners and developers may connect through various portals, but these transactional interactions aren’t enough to foster valuable innovation.

For that, partners need to get to know one another’s businesses more fully.

That’s why the bank, as orchestrator, needs to create an environment in which these companies can get to know each other’s businesses more fully. To provide that expanded level of support, the bank might consider organising conferences and other events, at which partners can give and receive direct, unfiltered feedback, review new promotions, and brainstorm innovations (perhaps through design-thinking activities, sprint sessions, and hackathons).


4. Set up a proactive compliance department.

Banks should be able to count on compliance departments that are rigorous, proactive and confident. The key shift in behaviour is that compliance now will need to develop an ability to flag issues before they become problems (versus being consulted in the wake of an incident). To do so, they need to move away from the more traditional advisor role into that of active risk management and monitoring. They need to move away from a bottom-up, subjective process that sits in an organisation siloed from the rest of the bank to an integrated, yet objective function focused on critical process breakpoints. For some compliance teams this may require a mindset shift not just a new process or a new internal client to support.


5. Take ownership of ecosystem security.

Security is a central element of trust, which is the foundation of a strong digital environment. Previous Accenture research has shown that the failure to safeguard data is the second biggest reason (behind cost) why consumers leave their financial services provider.3 And respondents to our current survey recognise a trusted brand as the single most important factor in making an ecosystem attractive to customers.

Banks orchestrating ecosystems should thus shoulder the responsibility for what happens in their ecosystem and take the lead role in security matters. They are originating business on their own platforms; if a breach were to occur, customers would see their brand as the primary brand no matter where in the chain of transactions it happened.

With this in mind, they should conduct mandatory outsourcing risk assessments on partners, share security expertise, and promote their security practices (including reporting practices). One bank we studied in the Asia Pacific region shares its security staff with strategic partners and suggests technology vendors to tactical partners to help them achieve higher security standards.


First-mover advantages and beyond

Banks in Europe (and North America) are generally behind their peers in the Asia Pacific region on the ecosystem front. And so far, European banks have focused more on retail- related ecosystems, with Spanish banks including BBVA, Santander, and CaixaBank, taking the lead. But coming late to the global party isn’t necessarily bad news. Banks here can build on what others have learned. And in these regions, large, incumbent players (with wide shares of customers) dominate many markets, and most are not yet participating in a banking ecosystem. First-mover advantages are still widely available.

Ultimately, however, ecosystem value will be told by the number of customer interactions that trigger interactions among partners and result in sales. So successful ecosystems will grow on the back of their ability to leverage data to spark and guide innovation. These five anchors will help position them to succeed.


About the Authors

Allesandro Secchi (ales [email protected]) is a senior principal, offering development lead, with Accenture.


Luca Gagliardi ([email protected]) is a senior principal with Accenture Research.


Nanna Svahn (nanna.[email protected]) is an associate manager and Nordic financial services research lead at Accenture.


1.  https://www.dbs.com / newsroom / DBS_launches_ Southeas t_Asias_largest_bank_led_ property_marketplace
2. DBS 2018 annual report
3. 2019 Accenture Global Financial Services Consumer Study http://www.accenture.com/us – en / insights /financial – services – consumer – study – 2019.


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