Fintech is Changing the Financial Services Industry
Banking institutions, credit unions, and large financial companies have been catching up with the development of new software and technological advances, mainly introduced by fintech startups. This phenomenon is rapidly and irrevocably changing the global financial landscape.
The financial technology revolution is spreading rapidly around the world, affecting many processes in the industry, including customer service, financial advice, payments and transactions, loans, insurance services, and account management.
Fortunately, it summarizes how fintech startups have impacted the financial ecosystem in recent years, and shows some determinable statistics:
- 85% of banks have made digital transformation a business priority
- Three-quarters of global consumers are using fintech services to send money
- 77% of financial institutions want to innovate more
- 60% of traditional banks will partner with fintech startups and 82% expect to expand these partnerships over the next 5 years
Here are 5 ways the fintech revolution has defeated the financial services industry:
1. Omnichannel Customer Experience
The omnichannel experience that meets the needs of new consumers involves not only mobile devices but also social networks and multiple messaging channels: email, live chat, and text messaging.
The need to facilitate customer communication across any channel is creating a truly customer-centric operation for businesses.
For users in the banking industry, the omnichannel experience means customers get consistent, seamless interactions online, no matter what device they use, or offline, through “smart” branches that integrate effortlessly with digital services.
As user behavior changes, the arrival of fintech means financial institutions are becoming smarter, aiming to migrate transactions and sales to digital channels to help create a unified and improved user experience.
Added this formula; Collaborative Navigation is one of the latest technologies to help financial services provide omnichannel support on your journey.
2. Customer Support Chatbot
Agents can benefit greatly from implementing these virtual wizards because they can spend less time on the phone working on basic queries and focus on more relevant or complex tasks.
Chatbots can also integrate with applications and other technologies and use machine learning to continuously expand availability.
From a customer’s perspective, chatbots are practical software because they can help 24 hours a day.
3. Open innovation for new development
Digital transformation always has to do with openness. Financial giants are increasingly engaged in external solutions and open up new ideas and developments to innovative third parties.
An Accenture report shows how the open concept is integrated into the approaches of many fintech startups. A real case is the German Fidor bank, which built a middleware with an open application programming interface (API), connected to existing banking platforms, offering a range of service loans, organizing emergency loans and sending money via Twitter.
The growing popularity of open innovation methods has fostered competition.
4. Blockchain and cryptocurrency trading
Following the open innovation movement, a great opportunity for companies in the financial services industry is to take focus on the blockchain sector. Cryptocurrencies have been disrupting the banking industry for the past few years, offering users faster and cheaper ways to complete transactions.
We have not yet seen how this wave continues to affect the industry by analyzing its long-term impact, but it is worth noting how it was implemented and quickly changed the way it was paid and marketed.
Blockchain provides a solid trading platform with greater transparency, and customers have moved cryptocurrency money, reducing costs and saving time.
5. Automation of financial advice
The robot consultants or virtual assistants took the world of assault financial advice, posing a major threat to traditional operators.
The pressure is likely to prevail, but the development of automated technology for financial advice continues to emerge and offers competitive solutions.
This automation takes the form of automated messaging through live chat and other communication channels, as well as workflows that can be built around the specific needs of the company and triggered by consumer behavior, driving sales and customer engagement.
Automation can help financial advisors and asset management agents capture leads, establish customer relationships, and provide more comprehensive services.
The changing expectations of digital banking are forcing the banking industry to reimagine how products and services should be delivered.
At the same time, fintech advances now cover all stages of the customer’s journey, including chatbot technology, machine learning, and AI, shared navigation, modern messaging, and automation, and there are more advances along the way.
Banking institutions and financial services should focus on maintaining a strategy that puts customers at the center of their processes to ensure a smoother, omnichannel experience.
Traditional retail banks will have to monitor the digital revolution led by fintech startups and industry challenges and consider opportunities for partnerships, open innovation, and strategic investments in order to significantly improve their online operations with the digital revolution.