The FinTech era in Financial Services has arrived and is here to stay. With the potential for reduced costs, improved service and innovative new platforms, opportunities exist for banks looking to take advantage of the latest technology.
The tide is turning.
The rise of FinTech companies, as well as the increasing enthusiasm among consumers to do business with non-traditional players, has unsettled the Banking industry. In PwC’s 2017 Global FinTech report, 88% of incumbents admitted to being increasingly anxious about losing revenue to innovators.
While this has historically created cause for concern, a sense of opportunity is also prevailing, and we are starting to see a shift towards embracing the disruptive nature of FinTech across the financial services industry. In fact, 77% of executives report that increasing internal efforts to innovate are high on the agenda, and 82% expect to increase FinTech partnerships in the next three to five years.
We are undoubtedly entering an exciting period. From the outside in, FinTech organisations are driving the charge to transform the way financial services operate. No longer solely a growing source of competition, FinTechs are now working in partnership with banks to streamline business processes and improve customer service. In this way, FinTechs support banks in side-stepping issues that have traditionally been problematic and allow banks to almost redefine themselves as challenger brands.
For many banks, customer experience remains the principle driver of disruption. Ease of interaction, faster delivery, and customer empowerment are all significant factors, with products like vScreen and vDoc eliminating traditional breaking points such as mail delays and document exchanges.
It is important that banks remain focused on meeting evolving customer needs and not merely ‘tech for tech sake’. Aligning innovation with strategic priorities, creating agile development processes and offering new technology in ways that work for customers can all be stumbling blocks. But with an average projected return of 20% on all FinTech projects globally, there is real benefit to be found through both improved operations and new opportunities for growth.
It is likely that today’s financial services landscape will look radically different in 5 years time. As FinTech gains even more momentum and change becomes the new constant, the most successful banks will be those who find ways to identify, assess and qualify new technology opportunities relative to both effort and impact. With an increasingly diverse range of new solutions, it is clear that a new era of opportunity is emerging for banks on the look out for innovative technology.