Why banks should think like a commerce brand

The financial exchange between an online consumer and a retailer depends on banks. However, the experience of that transaction occurs on e-commerce sites, mobile apps, or even on social media platforms. 

Consumers have become accustomed to this process and the seamlessness of these experiences. They’ve grown to expect the same speed, convenience, and personalisation from their banks as they do from their favourite e-commerce sites. 

Moreover, with social platforms like Facebook and Instagram having entered the game, customers have also become accustomed to the rapidly blurring boundaries between browsing and shopping.

To stay competitive, banks need to deliver experiences that match these elevated expectations and focus on experience- and discovery-based interactions.

The best way of doing that is to embrace the growing integration between banking and commerce, a road already being paved by disruptors like fintech companies and open banking initiatives:

• Fintech companies have challenged banks to enhance their digital offering through innovative and user-friendly financial solutions.
• Open banking initiatives have enabled customers to access a wider range of financial products and services from different providers through a single platform. 

If we think about the integration of e-commerce within banking as a spectrum, the most significant investment in that integration that banks could make would be to build their own e-commerce marketplace within their existing platform. 

While this would streamline the behind-the-scenes process of online transactions and eliminate the need for third-party processors, this type of investment represents a massive leap forward for traditional banks. The risk vs. reward factor will likely remain too high for banks to realistically consider in the short term.

Fortunately, there are other types of investments that fall along the middle of the spectrum that are more realistic for banks to explore as a worthwhile experiment.

• Instead of integrating a full-scale marketplace into their platform, for example, banks could create a platform for their customers to redeem their credit card points and loyalty rewards. This simplified marketplace encourages engagement while enhancing the value of existing banking platforms—driving increased spending and loyalty.
• Banks could also double down on consolidating their financial products and evolving their platforms into cohesive digital ecosystems. This would create a centralised place for customers to manage everything from savings accounts and credit cards, to investment and insurance—simplifying financial management while positioning banks as trusted advisors.
• Personalisation poses perhaps the most low-risk/high-reward opportunity of all. By leveraging customer data and insights, banks can offer highly personalised financial advice, portfolio management suggestions, and tailored product recommendations—improving customer relationships in a big way while creating new avenues for cross-selling.