By adopting a Bank as a Platform approach, banks are shifting to a business model that is based on service offerings as a means to deliver greater economic value.
Until recently, regulation of banking business models has been seen as too restrictive, discouraging new players from entering the market but at the same time enabling banks to enjoy a relatively comfortable competitive position. Banks have been able to earn sustained profits for decades, primarily through interest rate differences between acquired liabilities and asset sales, but also through financial intermediation.
This enviable situation is coming to an end. Banks now operate in a fiercely competitive market, with revenue streams being challenged by new customer behaviours, low interest rates and the entry of new agile market participants.
Banks are increasingly adopting new business models with services as the primary revenue generator. This concept shapes the Bank as a Platform vision, a scenario whereby the bank and other service providers make all types of services available to their customers, and where customers come in search of these services because they need them.