Fintech (Financial Technology) is transforming the financial sector by digitizing the entire customer journey with the help of new business processes, applications and products. Fintech’s processes are r edefining all customer experiences and keeping the customer at the centre of innovation have also forced traditional banks to invest in financial innovation so much that they have set up Fintech units even within their organizations. According to Statista’s “2017 FinTech Report” , the transactions of the numerous Fintech firms were nearly $3.5 trillion globally in 2017. What’s more, it is expected to grow to $8 trillion in the next four years.
Fintech: What the Customers are Saying:
According to Forbes, 75 percent of consumers say that Fintechs give them more power over their finances already. Fintechs seem to have an added advantage because banks’ antiquated services and their current technology infrastructure have left a huge gap of unmet customer needs. Becoming more digitalized can help meet those needs, but banks need to do much more than that to increase customer satisfaction and enhance overall customer experience. High personalized service and sense of belongingness combined with digital speed, convenience and care customers receive at crucial moments like taking major financial decisions is what will make all the difference to them.
Fintechs vs Banks: Who Wins the Battle?
Fintechs’ potential to unleash a new era of innovation and healthy competition is definitely noteworthy. Biggies like like JPMorgan are turning to Fintechs’ data to evaluate applications for loans. However, technologies that might compromise consumer identities or lead to instability in financial markets cannot be ignored. Presently, Fintechs’ products or services are not at par with the banks, in terms of size and security. Though one of Fintechs’ top priorities is safety, data that is available online can easily be stolen and used for other lucrative purposes by third parties. So Fintech completely taking over banks in the near future is less likely, but they have the power to greatly influence the present operating model of banks so as to enable them to minimize cost and improve service. Banks should find ways and means to collaborate with Fintech firms and not just reshape the financial landscape but also offer faster, more transparent, cheaper and user-friendly financial services for people of all ages and economic status around the world.
It is still a matter of doubt whether this tech start-up with enormous funding is in for the long haul to redefine entire banking system in this new digital and competitive era .
Advances in technology know no borders nor can technological revolutions be predicted, nevertheless, the possibilities that Fintechs offer are exciting.