On June 9, 2020, I had the pleasure of conducting a high-level training session for banking executives as part of the Banking Leadership and Management Program, organized by TrustBiz Asia.

The session served as an interactive dialogue on the changing structure of financial intermediation—a structural shift that has impelled Financial Institutions (FIs) to fundamentally re-imagine the nature of banking.

Tolerance vs. Affinity: The New Banking Reality

A core theme of our discussion was the critical distinction between “Customer Tolerance” and “Customer Affinity.” Historically, many financial institutions have mistaken a customer’s lack of alternatives for genuine loyalty.

At Acuitology, we recognize that digital disruption has permanently closed the “tolerance gap.” During the program, we explored the factors driving this change:

  • Fintech & BigTech Disruption: How non-traditional players are using superior UX and data-driven insights to capture market share.
  • The Open Banking Catalyst: How new regulations are removing the “data moat” that previously protected legacy banks, forcing a revisit of innovation and collaboration strategies.
  • Fulfilling Unmet Needs: Identifying the friction points in traditional banking that Fintechs have successfully exploited to build true affinity.

From Competition to Collaboration

One of the most significant takeaways from our session was the shift in mindset regarding the competitive landscape. Banks are no longer merely competing with one another; they are now learning to “race together” for scale and relevance.

This involves:

  • Strategic Partnerships: Collaborating with Fintech firms to accelerate product development and service delivery.
  • Platform Thinking: Transitioning from a closed-loop system to an open ecosystem where the bank can leverage external innovation.

Reflections

The changing structure of financial intermediation and increasing customer expectations have shaken the banking sector out of complacency. It is time for the banking industry to re-imagine banking to stay relevant and grow.

At Acuitology, we advocate for banks to revisit their innovation strategies and look for opportunities to collaborate with Fintech and BigTech firms. This collaboration is the only way to build a truly customer-centric financial ecosystem that meets the demands of the modern era.

“If you want to walk fast, walk alone. But if you want to walk far, walk together.” — Ratan Tata