Will Industry Stacks Be the New Blueprint for Banking?
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Will Industry Stacks Be the New Blueprint for Banking?

Jesper Damm
Boston Consulting Group, 2016
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Editorial Rating

8

Qualities

  • Innovative
  • Applicable

Recommendation

This perceptive report from professionals at the Boston Consulting Group demonstrates how, for banks, the old mold of vertical integration has become outdated. Competition has increased, particularly from newcomers leveraging technology that allows companies of all sizes to cut costs and enjoy economies of scale once available only to the largest firms. With size less of an issue, banks must increasingly compete at each level of the value chain. Though at times overloaded with management consulting jargon, this article presents some fresh insights into organizational alternatives for financial institutions. getAbstract recommends it to bank executives and financial industry analysts.

Summary

New digital technology and increased rivalry from upstart fintechs are loosening the hold traditional banks once had on payment systems and other areas of their business. Thus, a bank that wants to stay competitive must transition from providing services and infrastructure as a monolith to serving clients through flexible and rapidly adaptive business configurations. The evolution, akin to the shift from mainframes to PCs in the early 1980s, will translate into new roles for some banks and threaten the leadership positions of others.

The vertical integration framework...

About the Author

Thorsten Brackert et al. are professionals with the Boston Consulting Group.

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