Banking as we know is facing the most challenging time in the last 200 years from its creation, a critical moment of evolving – or disappearing.

Giants fell in the past, Goliaths as Blockbusters couldn’t move fast enough to not been beaten by agile contenders. For banks, the apparition of new players like fintechs, tech agile “giants”, and even their own lightweight evolution digital banks, is threatening them.

In the North American market, in particular, there is a great space to develop this mindset. 30% of the population does not use banks or consume financial services, and the other 70% who have a bank account, do not save money at all. About 20% of payments are still made with physical bills and currencies and, according to the FDIC (Federal Deposit Insurance Corporation) 2017 report, 6.5 million households do not have any banking relationship.

Few countries in the world have a banking market with as much potential as the US. To corroborate this promising digital scenario, by 2025 about 20 billion devices will be connected – equivalent to almost three times the world population. And just in the last two years, these devices have generated 90% of the data already produced.

In this scenario, banks have three possible ways. The first is the old way, creating a highly costly team of banking experts plus a team of developers and build their own platform, investing a considerable amount of time matching technology, innovation, and banking within a very static banking structure.

The second one is getting a core system that better fits into the bank’s definition and processes, adjust its processes to what the system allows, and try to guess the future (payments, needs, market, channel, among others) and design products and services today to serve future needs. In the end, banks have to select between having a digital version of a legacy system or a digital layer on top of a legacy system.

With these two approaches, the final customer obtains a limited experience and the engagement is almost inexistent. Everyone looks and basically calls themselves the same.

Banks can redefine existing business models and create new monetizations strategies being part of a larger ecosystem.

The last way – transformative way – places the bank with their Core system as a platform based company, the same strategy used by Netflix, Facebook, Uber with notable success. This means companies provide services for others to interact with the platform and you define and support different business processes and products as atomic pieces to compose more complex models. In this scenario, banks can redefine existing business models and create new monetizations strategies being part of a larger ecosystem.

This scheme allows banks to keep their place on the table as a trusted service provider, expose open APIs to interact with customers, business partners, or even other platforms and differentiate themselves in the offer of, not only product and services but integration and leverage.

From a personal perspective, today’s key differentiators for banks, and what their platforms have to achieve, in a way or another, is the ability to adapt their classic products and services to new market conditions, be flexible enough to apply new regulations, be agile to target new customer with a low time to market, be open to interact in open ecosystems, be secure to protect the customers most valuable asset, their data, and be highly efficient to serve most people and do it better.

Now it’s the turn for one of the most established and traditional industry to face the digital transformation. And history has been teaching us important learning to keep in mind: it is not the strongest that survives but the most adaptable.