Until just a few years ago, if you wanted a savings account, financial advice or a loan, you’d go to a bank. Not anymore though. FinTechs are the new next thing stirring up a storm across all sectors in the financial services, giving a positive twist to the term ‘disruptive’. Right from peer-to-peer lending, loan bidding marketplace, mobile payments platforms, crowdsource funding to robo-advice & blockchain, in naming a few, it’s not hard to imagine a world without banks. FinTechs have changed & continue changing the face of the game. Everyone wants improved ways of doing things, with a better experience that’s faster, easier & of course cheaper! That’s just what FinTechs are here for.
Expectations are evolving as new ideas and ways of doing things surface and take shape. While previously ‘digital revolution’ was all about customer service, replacing human interaction with online services, today millennials consider online digital services a given. Personalised services, speed & ease of use, better UX, greater security, transparency & regulation are on the top of the list. Customers, technology & regulations are rapidly changing, whereas the ‘incumbents’ struggle to keep up with this pace. Customers are more receptive to new alternatives to the traditional models of banking. With global brands like Google, Amazon & PayPal quickly moving into the fintech category, seamless experiences are leading customers to demand a better, friendlier user experience from their bank. Millennials remain the largest early adopters of alternative & rapidly evolving technology that questions the relevance of old traditional models of banking hampered by legacy technology, leaving no option but for incumbents to transform towards the digital ecosystem. The incumbents on the other hand are trying to keep up, heavily investing or buying FinTech’s that will keep them ahead in the ‘disruptive’ marketplace.
Open innovation is at the heart of digital innovation. For larger incumbents to stay in the game, it means engaging with external technology solutions, knowledge capital & resources, as well as opening up organisation’s own intellectual property, assets and expertise to outside innovators to fuel ideas, innovation, change organisational culture, identify & attract new skills and discover new areas for growth. So how should established banks & organisations keep up with the changing landscape where customers are more open to disruptive fintech offerings? While many organisations try to internalise their innovation turning to their IT departments to improve efficiency & facilitate game changing innovation, somewhere lowering costs, others however have realised the value of collaborating or threat of not doing so.
The markets are moving towards greater financial inclusion. In a learning & fast moving economy, customers at every level are changing how they operate, leveraging on their business network to collaborate & innovate with peers and learn from customers – that’s the only way forward. Right from blockchain technology changing the face of banking through to proliferation of AI, it’s undoubtedly a dynamic ecosystem broadening the reach, flexibility & level of innovation in the FinTech space, while cyber security & transparency cannot be ignored.