Digital partnerships crucial for banks, but difficult
I've discussed the payments revolution quite a bit as of late, noting often that banks face quite a conundrum.
On one hand, they don't want to be left behind. Toward that end, they can build their own systems, such as the clearXchange joint venture by Bank of America, JPMorgan Chase and Wells Fargo. Or they can partner with a large array of companies. When it comes to in-store purchases, for example, banks have forged relationships with multiple digital wallet players.
While I have warned that banks do not want to be pushed completely to the background in the emerging payment paradigm, it's increasingly clear that they are content to let others drive the movement. So what will be critical for them will be the partnerships that evolve. Unfortunately, developing these partnerships may not be for all banks.
"With the whirl of innovation, players are moving faster to deliver new propositions into the market and many are looking to digital commerce partnerships to unlock differentiated value. Most banks, however, are inexperienced at forging strategic alliances with fast moving start-ups and technology companies. As a result, they risk both poorly chosen gambles or sitting on the sidelines while game-changing partnerships are struck," notes btn.
One model might be cast your brand wide and make sure that you are represented as an issuer at the top of every digital wallet that's out there. Another strategy might be to seek partners that offer the best financial situation, in terms of fees to provision customer information to phones and the interchange fee split. There's a lot to ponder, but partnerships at this point are essential.
- here's the article