The financial landscape is changing, and it’s not only because of new technologies. It’s also due to the increasing number of people embracing fintech—and this includes regulators and banks themselves. Say’s John Mattera, as the fintech movement gathers momentum, both consumers and businesses will benefit from a more efficient financial system.
The increasing number of people embracing fintech
The number of people using fintech is growing. In fact, it’s becoming mainstream. In a recent study by PwC, 82% of consumers said they would be comfortable using a financial technology company to make payments or access their accounts–a figure that has increased from 75% in 2017.
Fintech has also become more widely accepted by banks and other traditional financial institutions as an alternative method for delivering products and services. This can be seen in how many banks have launched their own apps or digital banking features that use fintech platforms like Venmo or PayPal as part of their offering (more on this below).
Banks and regulators face regulatory challenges
Regulators, who were caught off guard by the financial crisis and have struggled to keep up with the pace of change since then, face an even greater challenge than banks do. They need to make sure that new regulations are not overly prescriptive or restrictive–and yet they also must ensure that consumers are protected from fraud and abuse.
Fintech is changing how we think about money
Fintech is changing the way we think about money. The traditional concept of money is being replaced by a new, more digital and transparent paradigm. This new mindset can be characterized by three key characteristics:
- Money becomes more digital–in other words, it’s no longer just paper or coins in your pocket; it’s also numbers on a screen (i.e., an account balance).
- Money becomes more liquid–you can transfer funds from one place to another almost instantly without having to wait for checks or wires to clear (this process is known as “the float”).
- Finally, this type of currency has no geographic restrictions so you can use it anywhere in the world with ease
Banks today have a chance to reinvent themselves
Today’s banks have a chance to reinvent themselves. They can be more customer-centric, innovative and profitable by focusing on the things that matter most:
- Customer experience
- Data analytics
- Mobile banking
There will be many opportunities for banks in the future.
Banks have many opportunities to reinvent themselves in the future. They can use fintech to improve customer experience, as well as their own internal processes.
Fintech is not just about creating new apps and platforms; it’s also about improving existing services through technology. For example, banks may offer a more personalized experience by using data analytics to understand their customers better and recommend products based on those insights (e-commerce companies like Amazon do this all the time). Banks could also use artificial intelligence (AI) to automate repetitive tasks like data entry or loan approvals, freeing up employees’ time so they can focus on higher value tasks such as providing advice or managing money market funds.
Banks have a chance to reinvent themselves and become more relevant in the future. Fintech companies are innovating in ways that will change how we think about money, but they will also affect other industries as well. The question is not whether fintech is coming but how quickly it will arrive and what impact it will have on banks when it does