Financial technology has been revolutionizing the banking industry by introducing entirely digital banks, real-time money transfer and even banking apps that allow you to ‘split the bill’ when paying for a meal out with a friend.
From a business angle, how quickly do banks have to react to this fintech revolution? Will their banks soon be deemed ‘outdated’ for not keeping up, or will fintech be a temporary phase, and traditional banking will always hold its authority?
Though many believe traditional print media would remain supreme, digital media took over, and even the largest publications rode the digital wave to remain relevant. Likewise, fintech is not going anywhere; it is here to stay, and disrupt.
How is fintech changing the banking industry?
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Fintech is increasing competition within the industry. [1] By lowering entry barriers for new products to enter the market, more business models can be created, subsequently increasing competition.
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Banks now, more than ever, need to keep up with the digital movement by increasing investment in digital innovation. For example, banks can integrate a more user-friendly customer experience, such as ‘text-messaging’ through their application, which can make customers feel more comfortable and heard, improving the customer-experience.
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Financial institutions are recommended to partner with fintech startups or technology experts for more cost-efficient results, higher revenue growth and risk-mitigation opportunities.
How is fintech helping its consumer base?
Fintech is becoming more and more favorable by consumers because of its many benefits. Fintech is;
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Customizable. Fintech allows users to customize and personalize their platform. For example, investment management applications allow users to view all their assets, investments and funds, in a user-friendly platform that they can edit and change as they see fit. This allows a greater sense of freedom for the user in comparison to traditional methods of viewing investments.
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Structured. Instead of writing down one’s investments and funds, fintech applications allow users to insert information that is readily and automatically structured. Without manually organizing finances, users can have more accurate results and remain time-efficient.
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A carrier of real-time information. Investment management apps or platforms, such as Investera, allow users to ‘see’ the performance of their investments in real-time, which allows investors to make better investment choices and decisions. Real-time updates from their sectors give them a competitive advantage.
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Mobile. Users don’t have to wait for the bank to open in order to make money transfers, and can access their information at any place, and at any time of the day.
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Secure. Fintech experts are ensuring day by day that the information you enter is always secured, as this is one of the pillars of any financial institution or entity. With fintech, users can be rest assured that their information is safe and un-hackable.
All in all, it is necessary for banks to integrate fintech into its services, in order to provide a more user-friendly experience for its customers that is cost-efficient, and to remain on the frontiers of the financial services industry.
Sources:
[1] KPMG