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The influence of new Fintech entrants is powerful in banking, offering them exciting opportunities to build solutions which can better serve their customer base.
FREMONT, CA: The banking landscape has become more competitive and is continuing to evolve at a rapid pace. But the digitization of financial services has resulted in some banks being left behind due to slow response changes. But fintech is capturing more momentum and here are the ways it is changing today’s banking.
• Less Cash and Paper
The world’s leading banks have made attempts to fight this trend, but the cryptocurrency overwhelmed them. They are planning to build a streamlined payment mechanism based on blockchain technology. For customers, this means using settlement coins that represent a flat collateral-backed currency. Cashless operations will expel transactions with paper money and thus use of paper for reporting, accounting, checking, and other back-office services will also decrease.
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• Online Power
Fintech tools provide innumerable capabilities online that avoid the need for physical visits to bank branches. Leading banks bet on closing traditional offices and implementing online customer service tools. This trend will benefit both customers and banks since the latter can reduce rent costs and payroll, while the former can use their time more efficiently.
• Bank As a Marketplace
Banks are turning into marketplaces of banking, financial, insurance, and other services and products. Fintechs design such open banking ecosystems for digitally savvy customers who prefer digital interactions. The new era of finance management where customers can find, compare, and pick services from one place is already here.
• Financial Literacy
Mobile banking is helping to expand people’s knowledge of budgeting, financial management, and investment, to name a few. Banks are also developing personal finance applications that are user-friendly and helpful. They will invoke curiosity among people how their money works and provide useful mechanics to improve financial health ultimately translating to increase in financial literacy.
Embracing opportunities offered by fintechs will indeed enable banks to create the right foundation to thrive in the modern competitive banking landscape. Anticipating this, banks should create new business within their existing structures that can adapt and collaborate on innovative opportunities.
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