New players, so-called BigTechs, are entering global financial markets and capturing new market niches by taking advantage of their technological innovations and huge customer bases. As these companies slowly begin their penetration into Kazakhstan, financial institutions in the country will need to choose one of three paths forward:
- Competition – globally, this strategy is losing as financial institutions, even those demonstrating advanced technological growth, cannot keep up with the growth of BigTechs. The fact is that new digital competitors are able to develop and market new offers better and faster than financial institutions.
- Partnership – partnerships with BigTechs allow financial institutions to develop new communication and sales channels as well as optimize operational efficiency and reduce marketing costs. Partnerships offer an interesting and important path forward for financial institutions to be able to survive and thrive.
- Transformation – an alternative to partnerships is for financial institutions to completely transform and start offering non-banking services, moving from a “my money” strategy to a “my life” strategy. Such a move, however, requires colossal investments, making it a realistic option for only the largest financial institutions. Perhaps the best example of this is Russia’s Sberbank, which is working to create its own online ecosystem through smart partnerships and the development of unique non-banking solutions to life’s frustrations.