Beyond Banking: How banks and fintechs go beyond the basics and attract clients

Published on Mar 07 2023.

reading time 8 minutes reading

The banking and payment industry is going through an accelerated transformation—which is no news for those working in the industry. In that sense, initiatives keep growing when it comes to the Beyond Banking concept for banks, fintechs and companies providing financial services to go beyond when offering attractive products. 

But what actually lies within this concept of going “beyond the banking” to acquire more customers and encourage them to engage more with financial products hired? In this article, we are going to explain what is Beyond Banking and its applications, in addition to presenting a Brazilian success story of a company from the retailcompany. Check it out!

 

What is Beyond Banking?

 

The term Beyond Banking conveys the idea of a wide variety of products and services that go beyond what traditional banks used to offer in the past.

That is a business model designed by associating banks , fintech and companies from different industries, such as retail, healthcare, entertainment, e-commerce, etc.

And how does it translate into practice? Through a partnership technologically enabled by APIs, it is possible to expand a portfolio of products and services offered to each client by banking and payment businesses, without compromising their budget and internal teams when developing those new features from scratch.

For instance, in one app, the client can make financial transactions, contract an insurance plan, go shopping at a supermarket and buy movie tickets.

This diversified ecosystem, provided by the association of companies from different niches and within what we call API Economy, is the Beyond model Banking.

 

Way beyond financial services: What’s led to that growth?

 

The Beyond Banking emerged a few years ago as a strategy to face the increased competition in the market, due to the digital transformation, the emergence of fintechs and the evolution of the embedded finance.

On the one hand, traditional banks needed to reinvent their business models and innovate so that they didn’t lose ground to a dynamic competition. On the other hand, many fintechs needed traction to scale their operations.

In that context, Beyond Banking represented an opportunity to focus on their strategy to attract clients by partnering with other companies providing technology, products and services from different industries.

Even some banks and fintechs, despite being potential competitors, have become part of the same partner ecosystem so they could grow together. A good example is what happens at Bradesco, one of the largest Brazilian banks, which invests in accelerating and expanding the network of fintechs around it: either through the acquisition and creation of fintechs in-house (such as Next, Digio and Bitz) , either by encouraging new businesses via investments and incubation through the innovaBra.

 

Want to learn more about how banks and fintechs are growing with Beyond Banking? Watch the panel at FEBRABAN TECH 2023:

 

Advantages in Beyond Banking for the banking and payment industry

 

Adopting Beyond Banking as a strategy brings a number of advantages for players in the means of payment industry, such as:

  • More knowledge on their audience and being closer to them;
  • Capability to offer a more extensive portfolio of products as well as financial services;
  • Opportunity to join new business without having to invest so many resources in development;
  • Improved purchasing experience by providing several solutions in one place;
  • Increased new client capturing and loyalty;
  • Revenue growth and diversification.

 

Read also | Open X: What’s next after Open Finance?

 

Open Banking, Open Finance e Beyond Banking: Sharing data to go beyond

 

Recently, Beyond Banking has been gaining new impetus to consolidate itself in the financial universe: the implementation of open financial systems, such as the Open Banking and Open Finance.

This because open finance is directly related to the strategy of going beyond the banking, as it enables the sharing of customer history information with other organizations, facilitating the contracting of services such as insurance, for example. Not by chance, some countries have also evolved in projects of open insurance projects in place.

After receiving consent from each user, companies and institutions associating with banks in the Beyond Banking strategy can learn more about their preferences, needs and ability to pay. Therefore, data sharing enables each provider in this diverse ecosystem to offer exactly what their audience is looking for.

 

Beyond Banking in action: How Mupay has become a super app

 

To help understand how Beyond Banking impacts on your users’ everyday lives, it’s worth learning about the case of the Brazilian supermarket chain Muffato Groupon our financial solution.

Aiming to diversify their business, the chain released a Mupay digital account and added to it a number of services to make it a ‘super app’. With that app, customers can not only make traditional financial transactions, but also have access to a variety of products and services like:

  • Purchases on Ifood and Uber;
  • Tickets to concerts and movies;
  • Prepaid phone charges;
  • Access to special discounts at the stores Super Muffato and Max Atacadista;
  • Withdrawals at physical stores;
  • Marketplace providing a number of advantages, such as special offers and cashback.

Thus, customers benefit from more convenience, and Grupo Muffato benefits from attractiveness, customer loyalty and sales.

Learn about Mupay’s super app and its release strategy in the article below:

 

Dock believes in the potential of building ecosystems to accelerate transformation

 

It’s essential to rely on partnerships to go beyond so that Open Banking becomes a reality for banks’ and fintech’s portfolios. It is also a key point to transform the industry and, consequently, society as a whole.

Through solutions that are central to users' digital lives, there is an impact on Financial inclusion and digital, which moves our market and also society. We are part of this evolution by making available through our platform Dock One the technology needed in payments and banking so that business can be everything it wants to be. Understand better in the video:

Beyond Banking: Takeaways from this article

 

  • Beyond Banking is a business model designed by associating banks and companies providing non-financial services and products, in order to offer diversified solutions in one platform.
  • Beyond Banking has risen as a strategy for traditional banks to face an increased competition in the industry due to the digital transformation and the rise of fintechs.
  • Open Banking and Open Finance help drive the Beyond Banking model by sharing financial information with a number of providers.
  • Advantages in Beyond Banking include increased customer loyalty and capturing by offering convenience and revenue diversification for partner companies.
  • Mupay is an example of a successful Beyond Banking strategy, offering not only financial services, but also purchases at special conditions at partner companies.
  • It is required to have deep knowledge on your audience and focus on their actual needs so that a Beyond Banking strategy is successful.

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