banks cannot play the ecosystem game.

It is one of the most widespread myths in banking: banks cannot play the ecosystem game.

I am not sure when I heard this for the first time, but it is becoming increasingly hard to defend.

Not because banks have suddenly become good at building ecosystems (most have not), but because the reality on the ground - especially when you look at the breadth of tools and capabilities now readily available - tells a very different story.

Ecosystems are no longer a choice to make or not - they have become the operating environment of the modern economy:

Customers already live inside ecosystems (BigTech, platforms, superapps). Banks are often just one service inside someone else's flow.
Value is created across journeys, not products - payments, lending, identity, data all blend into a single experience.
Distribution power has shifted. Whoever owns the interface and the data sets the rules; everyone else competes on margins.
Standalone propositions are being eroded. Even strong offerings lose relevance if they are not embedded in a broader context.

This is exactly why opting out is not a strategy for banks.

If you do not own distribution, you become invisible infrastructure in someone else's experience.
Product excellence is no longer a guarantee of value; control of the customer journey has become more important.
Even regulation is no longer the moat it used to be. In some cases, it accelerates disintermediation (think open banking access).
Disintermediation does not necessarily require disruption. You do not need to be replaced to be sidelined; you just need to lose the primary relationship.

All of this leads me to the biggest misconception of all:

Playing the ecosystem game does not mean banks must become BigTech.

But it does require a different mindset:

Stop trying to own everything. Orchestrating third-party products can work extremely well.
Banks do not need to own the whole stack to win. They need to own a critical role in the value chain and be indispensable to the end outcome.
Composable architecture is no longer a nice-to-have. APIs, event-driven systems, and cores that plug directly into external journeys are a prerequisite.
Choose your partners carefully. Most ecosystem value is captured (or lost) at the integration layer.
Redefine success: from product P&Ls to distribution reach, embedded transaction volume, and frequency of use across external journeys.

So the real question for banks in 2026 is not whether ecosystems make sense.

But rather:

Are banks willing to put in the effort to become part of the game - and do they really understand the cost of staying out?

Post by Panag

Author

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