The future calls for bold, progressive modernization that prioritizes customer relationships. Banking must keep pace.
Have you ever felt like your bank was competing for your attention, trying to outdo the next with new perks, rewards, and features? That’s not just a coincidence. It’s a sign of a major shift in the banking world. Open banking has thrown the industry into a customer loyalty battle like never before. Every bank wants to be your bank, and the fight for your relationship is fierce.
This competition is what RBC’s CEO Dave McKay recently called a “ruthless oligopoly” – a term reflecting how a few large banks have historically shaped the financial landscape. However, this is not only a Canadian phenomenon. Around the world, financial institutions of all sizes are navigating a changing market where traditional advantages are insufficient to compete. Traditionally slow to adapt, banks are finding themselves in a race to innovate. And with open banking giving customers the power to control their data, the competition now goes beyond offering the best interest rates or perks. It’s about who gets you.
If we look outside banking, consider what industries like airlines have done – they’ve mastered the art of loyalty, depth, and personalization. It’s time for banking to take the same approach, transitioning to dynamic platforms that understand individual behaviors and create a truly personalized experience for each customer. Financial institutions that understand how to create continuous value for their customers are the ones leading the way.
Banking, however, hasn’t fully embraced this shift. The challenge isn’t in building digital experiences. It’s in transforming the entire business model. Historically, banks have relied on their monolithic core systems to power everything. These systems did well in an era where centralization was key, but they’re not built for the future.
Ecosystem-driven banking: Moving beyond transactions
The future of banking lies in creating ecosystem-driven experiences where banks offer products and facilitate customers’ broader needs, from mobility to wealth protection. Banks that don’t evolve into these relationship-driven, horizontally aligned networks risk becoming obsolete.
Traditionally, banks provided services like mortgages or loans at the end of a customer’s decision-making process. However, the most successful banks moving forward will engage customers from the very start of their journey. Imagine your bank offering tools to help you find the right neighborhood, giving insights on local schools and providing more value beyond the mortgage rate. The reality is, at the end of the day, a mortgage is just a mortgage. The key differentiator will be how much value a bank can add along the way.
Fintech companies have been steadily chipping away at banks’ dominance by delivering highly valuable customer experiences – often targeting the most profitable segments of the market. As a result, banks are feeling the pressure, and rightfully so. The most lucrative parts of their business are being disrupted, not by competing on price, but by more agile players offering seamless, customer-centric solutions.
The answer for banks isn’t to compete on price but to adopt a broader strategy, adding value at every step of the customer’s financial journey.
A defensive strategy could involve bundling products and services into a “gold tier” offering, where a customer’s mortgage, credit card, and deposits are interconnected, creating more value for the customer and locking in their loyalty. Banks can no longer afford to rely solely on transactional products. Instead, they must create an integrated ecosystem that combines wealth management, everyday banking, and
financial wellness, delivering a seamless experience across the board.
Modernization vs. mindset: The real challenge for banks
Modernization is a consistent theme across every bank today. But the real challenge isn’t upgrading technology. What’s missing in most banks is the ability to think differently about how they deliver their products and services.
Banks have long designed products around what their systems can do rather than what customers actually need. Instead of asking, “What can our systems support?” banks must shift the focus to “How can we deliver real value to customers beyond the app?”
However, many banks are still held back by fragmented core systems across credit cards, lending, deposits, and mortgages. These disconnected systems make gaining a holistic view of the customer difficult, limiting innovation speed. To compete, banks need a unified platform to create tailored, competitive offers in real-time.
Zafin’s Product & Pricing platform addresses this challenge by externalizing product and pricing management from core banking systems, creating a centralized, flexible layer that enhances agility and scalability. With this approach, banks can:
- Launch new personalized offers in minutes, not years – overcoming core system limitations to quickly create and modify product and pricing structures.
- Adapt to shifting customer needs – ensuring competitive, market-aligned offers that meet changing consumer expectations.
- Comply with ongoing regulatory demands – automating compliance checks to ensure product propositions align with regulatory requirements.
- Streamline pricing strategies – enabling a tiered approach that supports loyalty programs and tailored product offerings.
The future of banking is rethinking how financial products are designed, delivered, and experienced. True innovation lies in creating seamless, customer-centric solutions not limited by legacy constraints but built for scalability, transparency, and long-term customer value.
