Shamayun Miah – Digital Reinvention of Traditional Banks to Fintech
The potential of new technologies to revolutionize the way banks and other organizations do business is at the center of much of the Fintech excitement. Fintech is an acronym that stands for financial technology, financial services, and business. Its purpose, in my opinion, is to reduce the costs and remove barriers to entry to make financial services more accessible to more people.
Banks grew from the practice of lending money to those who need credit, and Fintech grew from providing financial services to those who desired an easier way to manage their money.
Gates spoke at the National Press Club in Washington D.C. on February 5, 1994, about the future of computer technology, the changing economy, and the future of banking. Today, it may be beneficial to look at his speech to see how technology has changed.
One of the reasons for the success of Fintech is its approach to innovation and technology.
They have built their platforms on the Cloud, powered by Automation, Data, and Artificial Intelligence (AI) which has created differentiated and enhanced experiences for consumers that may give customized, engaging, and personalized banking experiences in the moment by utilizing such technology.
For the new adopters of Fintech, they value experience over costs. That is why they are moving away from mono-functional design to highly functional apps. They expect continued innovations and new functionality, design, and experience matter to them deeply.
That is why customers find Fintech over 500 times more valuable than traditional banking. That is according to research by BCG, who interviewed 300 senior executives of banks worldwide.
‘’The financial services industry is at a fork in the road. Technology disruption, such as artificial intelligence, robotics, and cloud computing, combined with consumer movements, is creating the groundwork for a new S-curve in the financial services business model.’’ Blog – How Artificial Intelligence is Transforming Financial Services – By Shamayun Miah
Large organizations have realized that to compete in the global Fintech industry, they need to improve their digital skills, talent, and capabilities. Established banks have advantages in serving the SME lending market and customers, which you cannot underestimate. They have a customer base, a trusted brand, and a massive amount of historical data and are well funded.
Traditional Banks and Fintech
Fintech start-ups are also looking at the widespread disruption of all financial services. As a result, Fintech is driving financial inclusion. We already know that mobile-based platforms and services are an integral channel for many.
The spectrum of services and the mobile-first approach is making financial services more accessible to the unbanked in developing countries. Many Fintech has developed innovative solutions around; Alternative credit scoring, Peer-to-peer lending, small-ticket loans, Digital wallets, and Alternative insurance underwriting.
Artificial intelligence, Big Data, and Automation
Artificial intelligence and big data analytics are at the core of many tech innovations. To survive and grow in the coming decades, financial industries must increase their investment in their technological advancements and make adjustments to their current technology stack.
Human-augmented advisers, for example, are augmenting the field service teams of French bank Metro Bank by bringing tailored experience and insight into specific demands. They can maximize their efforts to address client needs and satisfy them by using the post-revenue-generating advisor program.
Also, Softbank has added a new feature to its robots to assist customers in more than 140 locations. Moreover, Pepper is branching out to be a sales machine as well as a concierge assistant. The robot also greets customers as they enter the store and follow them around as they do their shopping.
Traditional banking institutions offer several advantages, including more trusted brands, longer customer relationships, and more data to make judgments.
Bank of America announced using the Microsoft Azure platform to get customers to use their mobile banking apps quickly and easily. A mobile banking app provides new products and features, providing the key to the frequent call-back customers crave.
The emergence of web and digital technologies is creating a new world that is faster, more global, more complex, and more visually oriented. On top of that, the business itself is getting more digital by the day. To keep pace with the speed of change, knowing how to embrace a digital mindset is necessary. As a result, there will be more opportunities in the market and fewer threats to market share.
Despite new competitors at every corner, it seems like traditional financial institutions will survive their impending doom by serving customers close to home. Banks may even snatch market traction away from new industry giants. Just how much new appetite for banks exists? We cannot tell without seeing how the new market players respond over the next five years, but it would be interesting to see how the competition plays out in this case.