Whether incumbents in the financial industry are at risk of becoming victims to death by a thousand cuts or being reduced to infrastructure providers, the biggest challenge in the age of disintermediation is the battle for the customer interface. In Scandinavia, the media industry is also joining in on the fun.
As the financial industry is facing similar challenges the media and telecom industries faced 10-15 years ago, incumbents from those industries now look elsewhere for new revenue streams. Where telecom operators are targeting the “underbanked” segments in developing countries through mobile banking, the media industry is aiming for the customer interface for financial services in its home markets.
For the media industry, digital advertising is not nearly as profitable as print advertising, and much of the online ad revenues now belong to Google and Facebook. I order to keep up with the competition, media companies like Schibsted and Bonnier are looking to the financial services ecosystem for new business models.
As an extension to user payments, classifieds and premium subscriptions, Schibsted has established its own payment solution through Schibsted Payment in order to improve existing business model by gathering user data and providing targeted ads.
In addition to payments, both Schibsted and Bonnier are investing heavily in comparison tools and marketplaces for financial services through both wholly owned services as well as investments through venture capital subsidiaries like Schibsted Growth and Bonnier Growth.
Schibsted has through Schibsted Growth invested in several fintech companies. Notable acquisitions include Lendo, a comparison site for unsecured consumer loans and price comparison site Compricer. Schibsted is also targeting digital payments through the investment in the cash back service kickback.no. With the rise of digital payments it is predicted that loyalty programs and analysis of customer insight based on transaction data is the new competitive advantage.
Bonnier is also targeting loyalty programs for digital payments, and recently increased its ownership in Refounder, Swedens largest and fastest growing cash back site through Bonnier Growth. In addition, Bonnier is the primary investor behind NFT Ventures, a venture firm focusing solely on nordic fintech investments.
The predicted unbundling of banks will result in a fragmentation of financial services where one stop shop model of banking is replaced by many specialized service providers. This potential future for financial services favors those who manage to re-bundle banking in a customer centric way.