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The competition between big financial firms and recently constituted fintechs has caused some friction in the financial sector. Rather, co-existence can be advantageous to both parties.
FREMONT, CA: The financial industry has finally taken up disruptive technologies, thanks to the emergence of fintechs. Fintechs employ technology in the most innovative ways to deliver products and services in the financial market. The traditional business models that finance companies used are now losing relevance. The advancements in technology have given rise to a new generation of consumers who demand the best services and a lot of conveniences. Although fintechs are generally seen as competition for conventional firms, there are a lot of opportunities that can be realized through intelligent collaboration.
The co-existence of big traditional firms and new-age fintech companies can prove to be extremely advantageous for the industry. The two can complement each other to cover the financial market with valuable products and services comprehensively. Fintech companies have technology on their side while conventional companies have experience and lots of customer data.
Data is becoming more critical than ever with the development of technologies that can leverage them. Big banks, although not proficient with technology, have evolved sufficiently to digitalize many processes. This has generated a vast amount of customer data. Customer data provides real insights into their behavior, which subsequently can give actionable information and help in business decision making. Fintechs have the right tools that can enable data usage. A partnership can thus push technology-driven innovations in the sector.
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With big data, cloud computing and advanced analytics playing an essential role in the finance industry, companies are preparing to add many new aspects to functioning. The e-banking revolution has already proved that there is a lot of potential in making services convenient and accessible for consumers. To keep delivering upon this parameter, firms will have to keep adding more facilities and cover loans as well as investment-related functionalities online. Strategic partnerships can enable smart management and practices and quick adoption of innovation.
Managing compliance is sometimes cumbersome for smaller enterprises. Regulatory compliance can improve manifold if the fintechs get assistance from more prominent players. To make the situation advantageous for all parties, collaborative approach is the ideal preface.