Your maturity result:

Beginner

Your score means your marketplace/embedded finance maturity is only at the beginning stage.

• Your plans and ideas to do business in the changing world of financial services are not sufficiently rich, concrete, or forward-looking.
• Your institution is neither prepared to be successful with banking ecosystems and embedded finance nor to serve customer relationships that build on trust.
• Your technology is — in total or partially — not yet set up to swiftly deal with the banking reality of tomorrow.

Your institution needs to increase its understanding of the opportunities and challenges of banking ecosystems, embedded finance, and the technology that will allow your institution to become more successful. Consider the following:

• Some institutions may suppose that they will remain competitive without banking ecosystems and embedded finance, but this can be a risky path forward. Don’t become a victim of avoiding the inevitable.
• The cloud is an enabler, and not the solution for all business and technology challenges. The outcome of your institution’s individual journey may be that it either consumes all the neccesary business capabilities or a carefully selected portion.
• You need to be prepared for ecosystems and embedded finance, but every financial institution will take a different journey toward the cloud.

If you are not already working on this, then small steps will help your institution get the experience it needs to design long-term plans for new business ideas, models, and the evolution of underlying technology. Consider the following:

• Third-party expertise can help you accelerate your journey toward banking ecosystems, embedded finance, and the API economy.
• Capabilities like buy-now-pay-later, consumer lending as a service, or even customer onboarding may be good starting points from a business perspective. These are typically manageable even with some share of legacy components in your institution’s application landscape.

Intermediate

Your score means your marketplace/embedded finance maturity has advanced to the intermediate stage. You have a technology strategy that will support your institution to cope with key business challenges of the future. However, refinement is mandatory. Consider the following:

• Create a strategic plan that defines both your institution’s role as a manager of its own banking ecosystem and as a participant in third-party ecosystems. Look at the opportunities of building or creating marketplaces.
• Assess potential revenue streams from contribution to embedded finance scenarios (ranging from payments and consumer loans to leasing and buy-now-pay-later models) and identify business and technology prerequisites.
• Realistically assess your institution’s current market position and that of its future. Some institutions may suppose that they will remain competitive without banking ecosystems and embedded finance, but this can be a risky path forward.

Use the strategic plan to:

• Focus on leveraging existing and emerging banking capabilities in the cloud to close existing technology gaps and enrich business capabilities. Banking as a platform will help to quickly create a digital subsidiary or to move to an entirely new application landscape. The banking cloud offers capabilities to rapidly and flexibly improve customer engagements. Modern banking applications in the cloud help modernize point functionality; use tech partners to accelerate this functionality.
• Examine the business intelligence and analytical capabilities within your application landscape and the degree to which they are able to support and automatically drive processes and decisions in embedded finance scenarios. Improve these capabilities and close gaps.
• Focus on enhancing customer trust by differentiating manual and automated decisions for the customer, finding a balance between profit and customer interest, and creating a mix of products and services that is optimized to the customer’s needs.
• Prepare for regulatory compliance in a proactive fashion by creating a foundational regulatory data platform with reporting and risk management tools on top, instead of using point solutions for each new set of regulatory rules.

Advanced

Congratulations, your score means that your marketplace/embedded finance maturity is advanced! Consider the following:

• Experiment with banking ecosystems and business scenarios that incorporate both out-of-the-box thinking and other major issues that your retail, private, business, and corporate banking customers are facing.
• Treat competing banks and fintechs as partners, instead of as symbolic icons that are only meant to enrich a marketplace.
• Deliver banking as a service to fintechs so that they can immediately start their business. If your own application landscape is not sufficiently sophisticated, you may consider working with a tech partner that brings the necessary experience.

If you are not already, focus more on:

• Using AI-powered analytics to enhance internal automation for banks and customer-facing processes, while also supporting automatic decisioning in embedded finance scenarios.
• Building and enhancing customer trust through explainable AI that helps the customer understand automated decisions and compliance regulation.
• Preparing for regulatory compliance in a proactive fashion by creating a foundational regulatory data platform with reporting and risk management tools on top, as opposed to using point solutions for each new set of regulatory rules.
• Keeping the customer — be it an individual firm or a corporation — as the north star of your planning. Additionally, besides participating in embedded finance activities and running/joining banking ecosystems and marketplaces, consider connecting isolated initiatives to support multiple constellations of businesses.
• Enhancing your application landscape so that it can support the combinations of on-premises and cloud-based applications that banks will typically use in the next few years. Also, transform your architecture so that it can work with multiple ecosystems that may change over time, i.e., turn it into a constellation architecture.