In a world where experience is everything, payment modernization is less about transactions and more about orchestration. Like a concert conductor synchronizing the rhythm between musicians and the audience, banks must stand at the center of the ecosystem and harmonize the needs of both merchants and customers to deliver a seamless, standout performance.

Blurring of boundaries

Traditionally, the banking industry has been structured around two distinct lines of business, each designed to serve specific client segments and market functions. One is the buy side, or retail banking, which primarily caters to individual consumers and small businesses. The other is the sell side, which has focused on serving large corporations, government entities, and institutional investors.

Over the decades, banks have prioritized the buy side to improve customer experience through intuitive design, seamless interactions, contextual relevance, and strong security. These efforts sought to build adoption, loyalty, and trust. The sell side focused on corporations, governments, and institutional investors, offering complex services such as corporate lending, capital markets, and investment banking. This work relied on risk management, regulatory compliance, and global market positioning.

Historically, the clear delineation between these two domains has enabled banks to specialize, streamline operations, and optimize service delivery. However, evolving market dynamics are increasingly challenging this siloed structure. The emergence of integrated digital platforms, shifting customer expectations, and the growing need for unified data strategies are prompting banks to reimagine traditional boundaries. As the industry transitions toward more agile and holistic operating models, the convergence of buy and sell capabilities has become a critical driver of innovation and competitive differentiation.

Taking a leaf from the disruptors

Fintechs and digital platforms are reshaping the financial services landscape by building ecosystems that serve both sides of the commerce equation, i.e., consumers and merchants. PayPal is integrating its consumer and merchant services into a single platform; Alipay connects daily activities like coffee purchases, travel bookings, and credit within one seamless value chain; and Klarna simplifies checkout for consumers while helping merchants boost conversions. Amazon’s consolidation of its marketplace and retail arms shows how merging supply- and demand-side operations creates efficiency and scale. Apple Pay, meanwhile, disintermediates banks by controlling one of the most valuable customer interaction layers, offering privacy and loyalty benefits while limiting banks’ access to critical customer data.

These platforms are not just winning over consumers but are also actively courting merchants with embedded checkout, diversified payment options, cash management, smart customer insights, and loyalty engines. By serving both ends of the flow, they improve sales, increase stickiness, and lock participants into a closed-loop ecosystem. Klarna, PayPal, Alipay, and Apple Pay now orchestrate the entire transaction journey, porting customers from third-party banks. They give merchants access to value-driven data insights, enabling them with richer visibility, precision targeting, and nimble platforms that facilitate product agility.

Many banks still rely on a one-size-fits-all model for products and services, with limited agility or micro-segmentation. The opportunity lies in building a unified ecosystem that engages digital-savvy Gen Z and Gen Y customers, while continuing to serve Millennials and Baby Boomers effectively.

Much like how different members of a household consume entertainment—where the older generation prefers traditional TV, while others opt for various streaming platforms tailored to their individual tastes and interests—banks must recognize the need for personalized experiences across customer segments.

The writing on the wall is clear: owning customer experience is now more powerful than owning the underlying financial product. For traditional banking institutions, the path forward lies in embracing modular, end-to-end experience-led platforms that drive product agility and micro-segmented innovation with an ecosystem play that can equip them to compete and thrive in this evolving landscape.

The new baseline for experience

Banks must step up as banking is no longer about offering products in isolation. Customers are drawn to platforms that orchestrate value across the entire journey. Gen Z, for instance, gravitated to Discord, Snapchat, Instagram, and Slack not just for communication, but also for the cross-functional features layered on top like gamified updates, delivery tracking, insurance, easy returns, and personalized recommendations. Payments, embedded into this flow, became part of this wider experience.

Merchants are looking for the same orchestration. They want platforms that process payments while improving conversion, reducing fraud, enabling instant payouts, and providing insights that drive growth.

Banks already have the foundations to deliver this at scale:

Large customer base with access to rich customer data
Trusted merchant and partner networks
Secure, resilient infrastructure
Diverse range of products and services
Regulatory strength
Long-standing trust

What’s missing is the ecosystem mindset driven by smart data insight to drive business outcomes. It means moving away from serving customers and merchants in separate silos. Banks need a unified system of diversified products and services that caters to all buyers and sellers through non-restrictive, open-ended marketplaces, creating stickiness through repeated behavior. The goal is to create value and drive business benefits aligned to customer needs and preferences

How banks can step back into the center

Banking’s next chapter is about reimagining products and platforms as embedded, agnostic, and resilient solutions shaped by customer expectations. These solutions must also be seamless, secure, and interoperable, delivered through rapid ideation, prototyping, building, and testing. According to Bain & Company, banks that lead with ecosystem strategy, combining financial and non-financial services, grow revenues twice as fast as peers.

To capture this advantage, banks must focus on:

Embedded finance: Deliver API-driven customer journeys in micro-lending, insurance, payments, and product bundling.
Merchant-partner consortia: Drive sales, loyalty, adoption, and customer value across On-Us and Off-Us segments.
Data-led engineering: Use real-time customer insight to cut fraud, sharpen targeting, and boost acquisition.
Innovation platforms: Accelerate idea-to-minimum viable product (MVP) through co-creation and rapid prototyping.
Loyalty marketplaces: Deepen stickiness and repeat purchases through rewards.
Unified wallet: Capitalize on the democratization of the ecosystem. With Apple opening access to its secure element and NFC protocol, banks can rethink wallet strategy across iOS and Android. A unified wallet simplifies payments, cross-pollinates products, consolidates data for insights, and strengthens fraud prevention. It keeps customers “cashed in,” making it harder to leave without losing accumulated benefits.

These priorities are already reshaping how banks compete and grow. At one retail bank, Virtusa helped integrate partners across three verticals, unlocking new monetization streams and improving retention by more than 20%. At another midsize bank, we helped simplify its buy-now-pay-later (BNPL) rollout using our modular orchestration framework. As a result, the bank launched a context-aware financing feature in under 12 weeks, which boosted its engagement among under-35 customers.

Orchestrating what’s next

Banking’s path forward is ecosystem-led innovation. By bridging the buy and sell sides, banks can create open, intelligent platforms that serve customers, merchants, fintechs, and even competitors. It’s not just about transactions anymore; it’s about orchestrating experiences and unlocking growth.

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