Page 2 of 2

Overcoming the chicken-and-egg problem ends in network gravitation, or in other words the positive network effects with a corresponding – new – user loyalty. Successful platforms scale beyond their core activities to additional activities in a bid to maintain this pull or virtuous cycle economy. Among those are financial services made attractive to non-finance companies by regulatory initiatives such as PSD2. As a result, distribution champions gradually grow in (data) mass and orchestrate or even dominate the client journey in a diversified manner, like for instance WeChat.

And it is this dynamic in particular of «beyond the core» interaction that is a cause for alarm at the banks. The business model discussion has moved beyond network partnering discussed in the context of fintech. More to the point, it is distribution which has moved to the fore. The user loyalty to platforms mentioned earlier increases the danger for banks that they will lose the power over communication and distribution and to be reduced to being a mere provider of products.

«This is the biggest weakness of the banks»

The fundamental question therefore is whether banks hold the mentioned platform idiosyncracies or if they are able to develop them. The answer is probably no. But for a few exceptions they lack the potential to achieve the mentioned network gravity through their core business and to win the «war for mindshare».

And this probably is the biggest weakness of the banks: their core activity in the context of the client journey nowadays in most cases isn’t sufficient and not social enough – i.e. compassionate and supportive. More to the point, banks are basically forced to provide services that are peripheral within the context of the customers' social environment on the basis of low or no impact – for instance through chatbots, optimized for the benefit of the customer – to allow clients to pursue digital activities that are more social, in keeping with the Zuckerberg diction that time spent on digital platforms is time well spent.

«What then would I be as bank?»

The wish of many banks to be digital platforms isn’t sustainable but merely remotely controlled artistry. The future belongs to the distribution champions. They are technological trendsetters as well and the autonomous implementation of artificial intelligence by banks is intrinsically less intelligent. The discussion of how a traditional bank can successfully attach to a multi-provider platform and how it can position itself is therefore more promising.

What would happen if a bank would assign sovereignty over data and profile in all its consequence to the client? If the client would define his (social) needs for transactions and if user control, in particular with third parties, were to be in the hands of customers? Would such a client-steered relationship finally make open banking tangible and redefine the logic of inclusion fostered specifically by tech giants? What then would I be as bank?

Patrick Hunger, 47, was appointed chief executive officer of Saxo Bank (Switzerland) in September 2016. He is responsible for growing the business for active traders, investors and wholesale clients, and for positioning Saxo Bank as partner in digital transformation. Previously he worked for Credit Suisse Trust, most recently as general counsel and member of the management board. He graduated at University of Zurich and holds an EMBA from University of Zurich as well as an Executive Master in organizational psychology from INSEAD, Fontainebleau.

Previous contributions: Rudi Bogni, Peter Kurer, Oliver Berger, Rolf Banz, Dieter Ruloff, Samuel Gerber, Werner Vogt, Walter Wittmann, Alfred Mettler, Peter Hody, Robert Holzach, Craig Murray, David Zollinger, Arthur Bolliger, Beat Kappeler, Chris Rowe, Stefan Gerlach, Marc Lussy, Nuno Fernandes, Richard Egger, Maurice Pedergnana, Marco Bargel, Steve Hanke, Andreas Britt, Urs Schoettli, Ursula Finsterwald, Stefan Kreuzkamp, Oliver Bussmann, Michael Benz, Peter Hody, Albert Steck, Andreas Britt, Martin Dahinden, Thomas Fedier, Alfred Mettler, Brigitte Strebel, Peter Hody, Mirjam Staub-Bisang, Nicolas Roth, Thorsten Polleit, Kim Iskyan, Stephen Dover, Denise Kenyon-Rouvinez, Christian Dreyer, Kinan Khadam-Al-Jame, Robert Hemmi, Claude Baumann, Anton Affentranger, Yves Mirabaud, Katharina Bart, Frédéric Papp, Hans-Martin Kraus, Gerard Guerdat, Didier Saint-Georges, Mario Bassi, Stephen Thariyan, Dan Steinbock, Rino Borini, Bert Flossbach, Michael Hasenstab, Guido Schilling, Werner E. Rutsch, Dorte Bech Vizard, Adriano B. Lucatelli, Katharina Bart, Maya Bhandari, Jean Tirole, Hans Jakob Roth, Marco Martinelli, Beat Wittmann, Thomas Sutter, Tom King, Werner Peyer, Thomas Kupfer, Peter Kurer, Arturo Bris, Michel Longhini, Frederic Papp, Claudia Kraaz, James Syme, Peter Hody, Claude Baumann, Dennis Larsen, Bernd Kramer, Ralph Ebert, Marionna Wegenstein, Armin Jans, Nicolas Roth and Hans Ulrich Jost.