Fintech: Shaping the Future of Banking

Banking CIO Outlook | Monday, August 12, 2019

FinTech has changed the banking scenario as companies tend to fulfill the digital needs of the customers, moving towards success.

FREMONT, CA: Technology and evolving customer requirements are having a dramatic effect on the way today's markets operate. The global economy, the expanding importance of innovations as well as extensive uses of technologies, has transformed the banking business globally. Fintech has become an indispensable part of banking as banks have begun to compete beyond financial services facing growing competition from non-financial institutions providing. The emergence of digitization and technologies like mobile, VR, IoT, AR, Blockchain has revolutionized the global market in each segment. Fintech sector is flourishing with the rise of digital investment and is an indicator that soon it will continue to prosper in the upcoming years. These recent tendencies require banks to boost investment in fintech and rethink service distribution channels.  

Fintech can be turned into an opportunity as it provides better functionality and flexibility in some areas and aggregation of services. The aim is to analyze the modern trends in banking, recognizing opportunities, and uncertainties of fintech for banks. Timely integration of fintech into business enables banks to get an advantage in the burgeoning competition. Fintech is a segment at the juncture of financial services and digital technology. It implies the use of digital technology that is centered on start-ups and new market entrants pushing to innovate products and services. Fintech is attaining significant momentum in the business and disrupting the traditional value chain.

FinTech relates typically to a small start-up business that focuses on developing innovative technological solutions such as big data, online banking, alternative finance, mobile payments, and financial management overall. As fintech's continue to rise in popularity, more banks realize that the new kids on the block may be here to stay. For banks, fintech partnerships offer an agile and iterative approach to innovation without the requirement for massive capital expenditures. They help in encouraging a higher standard of trust with consumers. For fintechs, banks come to the table with deep pockets, vast amounts of real-world infrastructure, immense customer bases, and big data.

The banking business is all about encouraging higher customer satisfaction and management. Fintech highlights on integrating digital trends with that of consumers' expectation that results in enabling customers digitally. Most of the conventional players are still lunging on outmoded customer-oriented solutions, which is not the requirement of today's customers. Fintech grants 24/7 access to bank clients and provides services that are accessible via the latest digital channels such as mobility, social media, internet, etc. According to a report, by 2020, social media will become the primary means to connect, inform, engage, and understand consumers. It will likewise be the channel where consumers would research and compare banks' offerings. Fintech is augmenting momentum because the assistance offered to appeal the majority of customers today. Most Fintech businesses provide speed, simplicity, customer autonomy, and distinct abilities that are not part of a bundled service. The majority of Fintechs all share a general strategy by transferring control to the consumer. This means giving consumers the authority when it comes to making the best financial decisions, through transparency and easy access to information.

Banks are now converged on increasing the utilization of open development and Software-as-a-Service (SaaS) solutions being proposed by Fintech providers. This enables the banks to put efforts to efficiently integrate and simplify operational capabilities in the banking system and process toward mobile delivery advantage. The application program interfaces (APIs) facilitate Fintech to develop value-added solutions that can seamlessly be integrated with bank principles. Fintech advances have proceeded to shape and build the future of the financial services industries and businesses.

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