bankingciooutlook

3 Reasons Why Banks and Fintech Companies should Team-Up

Banking CIO Outlook | Thursday, December 12, 2019

With the customer's rising expectations for digital capabilities, keeping up with industry trends and customer needs has become imperative for bankers.

FREMONT, CA: With the banking sector being in a state of transformation, customers are expressing the increasing desire to access financial services through convenient digital channels. A new wave of fintech start-ups has produced novel products for banking services. The advantages of emerging technologies have never been higher, and yet, large conventional banks are still striving with the complications of legacy systems and tools that restrict them from innovating at the pace and scale of challenger brands. the following are a few points to prove why banks should collaborate with fintech companies.

Customization                                            

Digital companies are much better placed to offer highly customized solutions. In spite of having access to a treasure trove of user insights, the burden is on legacy institutions to implement these insights for the advantage of the consumer in the order of customized and contextualized solutions. 

Digital distribution

The acceleration of fintech firms has driven incumbents to re-evaluate service and product distribution. Fintech firms highlight the uniformity of design and power of conceptuality, harnessing the power and convenience of always-on digital devices that users are increasingly expecting.

Operational effectiveness

Beyond the cost advantages delivered by the digital technology used by fintech firms, a wholly rethought operational back-office has followed in modernized delivery and product development that offers a significant competing benefit. Fintech firms have changed the game throughout internal effectiveness and external simplicity, from mortgage loan applications delivered on phones to single-touch peer-to-peer payments.

Many banks have now entered into a collaboration with fintech organizations. The relative affordability and fast access to cloud environments have enabled hundreds of competitive banks and non-financial institutions to bring banking solutions to market fast. Fintech start-ups center on producing innovative, customer-centric solutions, including a variety of services, like P2P lending, payments, trading, and mobile banking, amongst many others. The partnership strengthens the competitive situation of established banks by compressing the time taken for new products and services to reach customers.

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