Banks Go Beyond Banking: The Expansion Towards Non-Banking Services

Abstract

Abstract Banks are traditionally seen as providers of financial services such as deposit-taking, lending, and payment services. In recent years, banks expand their range of services to include non-banking services far beyond that to encompass an ever-widening scope of conveniences for the customer. Certain banks are gradually going beyond traditional banking engaging in services related to everyday lifestyle activities, mobility, entertainment, dining, and e-commerce, stepping on the opportunities provided by the digitalization and in collaboration with third parties. The observed trend is driven by banks’ ambitions to attract and engage customers in a comprehensive way and to create stickiness to their digital platforms. This strategy is an answer to the raising competition from fintech companies, which disrupt the traditional way of doing banking incorporating a holistic approach towards the customer needs. This article gives an overview of selected examples of banks which have gone “beyond banking” and underlines this competitive strategy as one of the factors for their market performance. Those examples are used to define a high-level benchmark framework and to prove the main research hypothesis that the provision of non-traditional banking services by banks and their participation in ecosystem partnerships represents an effective business development strategy to remain competitive and to attract and retain customers. The article reviews the current state of deployment of the “going beyond banking” strategy by traditional banks on the Bulgarian banking market and demonstrates clearly that the biggest banks on the market are those with the highest level of GBB deployment strategy.