The Unbundling of Banking

Much has been discussed around app unbundling in general as we have seen major technology brands break out their offering into different apps over the past few years. This article draws parallels to banking, just just in app offering but also the unbundling of the components of larger banks by small firms focused on one specific product area.

Better or worse? This is really the question. Unbundling (integrated model vs. niche focus) means breaking out the customer experience. From a product person’s perspective this offers many opportunities and also has major implications to the customers and the business.

Two types of unbundling

  1. Different companies providing parts of the customer facing ecosystem
  2. One company splitting their own user experience into different parts

A quick example with payments. Do you connect your bank account to Facebook Messenger and pay there? Do you have a wallet app from you bank splitting out the experience and making it faster to get to and simpler to use payment functionality?

Simplification or complication?

Unbundling can help or hurt the user experience and it certainly will not appeal to everyone. These focused user experiences can have a large impact on customer satisfaction. In one sense you can greatly reduce user friction, creating a much more effective experience. The trade-off is how many services the customer has to navigate to get a single job done. Do I need to check my balance in one service and then switch to another to pay? Do I need to get three or four layers into the service to get what I need if all the functionality is in one service? These are the questions surrounding the idea of unbundling.

The consumer Fintech ecosystem (A few examples)

This is far from an exhaustive list but provides examples in each category for further research.


  • PayPal
  • Deposit Solutions


  • SquareCash
  • PayPal
  • AndroidPay
  • ApplePay


  • Lending Tree


  • WealthSimple

These are examples of different companies forming each part of the user experience. You can see how they delineate themselves into specific areas such as storing funds, enabling payments, borrowing and finally investing in securities (funds, ETFs, stocks, etc). The first three are core banking in the form of store, move/access and borrow. Investments are a larger industry with many different types of existing players including financial planning firms, brokerage firms, self-directed investing firms and banks. By combining these different companies you can create a “full” experience with the potential for more tailored customer interactions given the focus of each. It may also be too much to expect the customer to navigate such a network of different components.

In addition to these FinTech names many banks also have unbundled experiences through multiple apps such as one for budgeting or payments vs. a core banking app itself.

There are also specific jobs customers are trying to get done which can be made more accessible through unbundling. Changing the flow of a web app or in-store experience will enable faster service for each customer’s unique need. So how do you go about identifying candidates for unbundling?

Start with different customer needs

Is this a cash management need that is more about storing and moving/accessing money? Perhaps you integrate quick access to payment cards with account balances or the last transaction. If this is the need for advice on a mortgage or investing in a security (mutual fund/stock) perhaps you being a book an appointment option to the forefront or an option for an agent to give them a call. On certain platforms like Android you can also use “widgets” to expose functionality to the customer in different ways. Although the question of one vs multiple providers is different from one vs multiple apps there are many similarities and the answer has implications to both sides.

The great thing about digital is the cost to scale experimentation is very low relative to the benefits of improved customer experiences, increased engagement, higher retention and ultimately more value for everyone. The same with digital to physical channel hand-offs. You can experiment with these to see what works best.

A starting place rather than a conclusion

There is no one-size-fits-all approach to unbundling. Nothing beats experimentation here but you can use your understanding of the jobs customers are trying to get done to choose what you are experimenting with.

Don’t try to guess, start testing in a few key areas and have firm quantitative metrics for success. If you find yourself wondering where to start think of metrics of customer behaviour like number of telephone transfers, clicks to get to a task in an app or returning users to name a few. Qualitative techniques like interviewing are also powerful if you are looking to choose areas to start experimenting. Just remember to set clear exit criteria with quantitative success metrics.

If you are looking to brainstorm or chat through your ideas after reading this article reach out. I would love to discuss!

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