It’s no secret that the more forward-looking banks and financial institutions are quickly discarding the product mentality in favour of a data-led service strategy in order to remain competitive in a market overflowing with innovation.
At its core, banking is transforming. New technologies are developing, consumer expectations are changing, and the competitive environment is getting more complicated.
In this setting, banks face competition from a wide range of companies, including FinTech startups, Big Tech companies, and many more. Consumers’ entire banking experiences are now fairly compared to the greatest digital goods and services offered across a wide range of industries.
Consider it in this manner. When you have competitors like Netflix, Spotify, Amazon, and Instagram as neighbours, you must give your customers a comfortable experience. As new trends emerge, people’s expectations change for everything from the app UI to customer service.
As a result, banks must constantly change to stay one step ahead of the competition. One area where banks are investing heavily is design. Banks can establish user-friendly websites and applications, enhance the customer experience, and boost brand loyalty by comprehending the importance of design.
Moreover, incorporating technology to enhance their operations, such as digital banking systems and predictive analytics.
The banking experience has traditionally depended heavily on personalization. Customers must, after all, feel comfortable entrusting their bank with their personal funds. In the past, trust was built via interactions with people and close connections.
However, as the banking sector has automated, delivering the same level of personalization has grown more difficult, opening up a sizable opportunity for businesses setting the pace.
Make it immediate
The world is becoming more and more digital, and conventional financial institutions are beginning to seem archaic. Faster and more practical methods of money access are what consumers want.
The emphasis on speed and convenience is particularly noticeable in the payments sector, where businesses like TransferWise and Square have disrupted the status quo and forced banks to implement more immediate payment and customer care procedures.
Brazil’s PIX system, which enables quick payments every day of the year, is another famous example. The new technology allows for instantaneous and cost-free transfers.
People now have unequaled access to financial management tools and services that were previously unavailable because to the exponential rise of the fintech sector. And the concept of open finance is a key factor of the change.
The phrase refers to the practise of financial service companies opening up their platforms and data to outside developers via APIs. This enables the development of fresh apps and services on already-built infrastructure.
Can fintech a force for good?
Financial service providers have been driven to “self-disrupt” in order to keep up with technology and perform better as a result of the disruption of the banking sector.
Fintech lowers the barrier to entry and increases access to financial services for more individuals by reducing the cost structure of providing them. In the end, financial inclusion made possible by fintech can lessen inequality.
Another illustration is how insurtech uses blockchain technology to increase insurance access. Customizable insurance, often referred to as parametric insurance, has been made available by insurers like AXA to protect their clients from the possibility of pre-determined parameters like flood or drought.
A number of significant banks recently announced plans to open up their APIs so that outside developers might create new applications and services. This includes financial institutions like ING, BBVA, Barclays, and JPMorgan Chase.
Due to the big banks’ actions, the banking industry is undergoing a tremendous shift as a result of their opening up of its infrastructure and data to new ideas.
Consumers will benefit from the creation of new goods and services, while developers will have access to a variety of information and tools to help them create cutting-edge new solutions.
The future of banking is likely to be increasingly shaped by open finance as the banking sector continues to change.
Chief product officer at Dragonfly Financial Technologies , Jim Gillespie, said: “Our FinTech Integration Center offers frictionless integration to well-known FinTech applications, giving small businesses embedded, real-time access to their bank without log in separately to their bank.
“The FinTech Integration Center, which is fully integrated with Dragonfly’s Universal Online Banker (UOB) solution, uses standardised connections to assist banks in connecting in real time to well-known applications, enabling small business banking customers to receive service from day one.
Advantages provided by the FinTech Integration Center:
- Account balance and activities are automatically updated in real time.
- Companies may swiftly and easily reconcile bank transactions with a single click, increasing accuracy and saving money and time.
- Instant access to the best business accounting systems, with the addition of new business applications on a constant basis to make business banking more and more simple.
- Simple access with Universal Online Banker using the same login information and authentication.