Marketplace Banking Rising Opportunities and Threats Influencing the Sector

Published on : Apr 18, 2017

Albany, New York, April 18, 2017: Advances in technology are allowing for delivery of banking products and services more conveniently and effectively than ever before, thus creating new bases of competition. Consistent management and decision support systems provide the bank that competitive edge to forge onward in the banking marketplace. To explore more information on this, Market Research Hub (MRH) has recently announced the addition of a new study, titled “Banking as a Marketplace: Opportunities and Threats” to its vast repository. This study is purely based on interviews with industry figures and secondary research which highlights the opportunities and advantages offered by the marketplace banking model for both new entrants and incumbents.

In the first section, the report offers a detailed overview of marketplace banking and the current status of open banking initiatives. The advent of ‘open banking’ is set to be the most seismic shift in financial services since the online banking trend has become popular. Open banking will lead to the formation of new business models, including banking as a marketplace. In this scenario, a bank assimilates third-party services into its own platform or marketplace, where consumers can access products across the market in one place.

Marketplace banking offers several benefits, not just for competitors but for incumbents. Even the best-resourced banks cannot truthfully hope to offer market-leading products across their entire range, and a marketplace strategy will allow them to quickly and cheaply substitute superior offerings from third parties. Owing to these features, Marketplace banking offers new ways to generate revenues, which covers features, such as

  • Access fees
  • Data-driven revenue
  • Commission fees

Moreover, the report provides key insights into the status of regulatory developments that are driving open banking initiatives in the UK and Europe. According to the study findings, the status of regulatory developments that are driving open banking initiatives in the UK and Europe. Currently, regulators in the EU and the U.K. are leading the way in forcing banks to open up their systems to third parties in order to promote competition and innovation, and new entrants are at the forefront.

The goal of the marketplace banking model is to replicate the integrated experience that banks provide to their clients, without giving up on the supply of the most advanced solutions that only collaboration with specialized third parties may provide. The report also discusses the advantages of marketplace banking with respect to revenue generation, product provision and alliances with fintech providers. On the other hand, key risk factors banks need to consider when adopting for marketplace strategy are also analyzed.

Companies mentioned in the report includes:

  • N26
  • Starling Bank

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The report further finds that Starling Bank has the most advanced open API strategy in UK banking and N26 in Germany has partnered with several providers to expand its product range.

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