How FinTech startups are changing the retail banking

Sarah Dunsby

Groundbreaking changes in international finance

Phillip Nunn talks about the groundbreaking changes in international finance, thanks to the rise of FinTech.

The advent of FinTech has changed the global financial landscape in ways never imagined before. This has made a significant impact on how traditional financial institutions do business. Easy availability of finance has led people to opt for FinTech over traditional channels. As a result, we are witnessing a paradigm shift in the ways financial services are meted out.

In light of these facts, it becomes necessary to examine how things are changing and that is what we are going to do here. Read on to know what you can expect from FinTech startups and how the future is going to be forged by their services.

Why are FinTechs so popular?

The world of today is marked by speed and efficiency. With the internet, people expect faster delivery of products and services and easier availability. FinTech startups have begun to capitalise on these assets and begun delivering services marked by rapidity and precision.

Estimates suggest that FinTech will account for as much as 20 to 40 per cent of the global financial market by just 2025. These numbers are indicative of the growing importance of FinTech and them usurping traditional banks as industry leaders.

Social Media-driven banking is one innovation that perfectly encapsulates all that is great about FinTech. The use of bots to navigate transactions has made things easier both for business as well as customers. That is why it is only natural for people to opt for these services rather than traditional mediums.

What are the studies indicating?

A recent study was conducted by Experian under the Forrester Consulting Study initiative. It showed that an overwhelming 73 per cent of people believe that digital transformation will eliminate traditional financial systems soon.

The global digitalisation has introduced immense competition and democratised the financial landscape. It is calculated that over 30 per cent of traditional financial institutions are currently not able to provide a satisfactory digital experience. So, this mandates that financial institutions introduce a radical overhaul of their existing structure.

The FinTech Adoption Index, which was recently accepted, showed that people prefer easy account setups. In fact, over 4 per cent of people in the survey cited this as their major reason for going to a new provider. Moreover, the cost of acquiring new clients is reduced for FinTechs. This is why they enjoy an advantage over traditional financial institutions.

What can traditional financial institutions do to cope?

The first and foremost thing that traditional financial institutions need to do is develop value-added services. In addition, they must also develop the brand value as finance is largely predicated on brand image and associated trust. Also, this must be further enhanced by greater levels of security.

Naturally, the only reason FinTechs are a rage is because of the ease of service. If traditional financial institutions are able to optimise their services then they can certainly match up. Since they already have a good brand image, it will also be easier for them to develop a loyal customer base. However, this requires them to be at the helm of industry-wide innovation and staying abreast with the latest developments.

Can FinTech startups thrive?

FinTech is a domain marked by rapid innovation and change. This is further enhanced by greater security and ease of access. Naturally, the future is bright and promising for those willing to dedicate resources to innovation and technology-driven services. So, any FinTech that is able to deliver a quality online service, coupled with security and brand status, is sure to succeed.

Without a doubt, the international financial scenario has changed significantly. This means that companies big and small must innovate, dedicate and expedite delivery of trusted services. Thus, continued success demands a futuristic vision from all and necessitates rapid innovation for better servicing of clients.

For more information on cryptocurrencies and FinTech, follow Phillip Nunn at phillipnunn.co.uk. He is an eminent industry speaker and renowned thought leader.

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