Fintech is an area that had traditional bankers running for cover. Calls for stricter regulations over the sectors, especially in the area of cryptocurrencies, were the knee jerk reaction for most banks.
You cannot really blame them. After all, it is projected that banks in the United Kingdom alone are set to lose around about 40% of their retail banking to Fintech by 2020. That is a big bite of the profit pie for them, and it will really shake things up.
But is it really such a bad thing? Traditional banking is slow to change, if it changes at all. Fintech, on the other hand, embodies change and new ideas. It focuses on customer pain points and aims to solve them in a seamless manner; it is more focused on the client and the end results.
Banks, on the other hand, tend to work the other way around. They do try to solve pain points but mostly on terms that are favorable to them.
Take cryptocurrencies, for example. Some companies, like Expedia are changing with the time and allowing payments with Bitcoin, along with their normal promo rates. It is worth mentioning that Expedia could not exist in the first place without Fintech, as instant online payments are essential to their business model.
They’ve acknowledged that clients want to be able to pay in a different way. Does that mean that your bank is going to let you pay your bond with bitcoins? Probably not, and certainly not anytime soon, if it does come to be.
But banks are getting onto the Fintech bandwagon. What we have already been seeing, and can expect to see more of, is banks creating partnerships with Fintech.
This is an exciting time for clients and we can expect to see a lot more innovative financial products that are extremely useful and user friendly. Products centered on what clients actually want, rather than what banks think that they should have.
For the Fintech market in general, expect great things. This post has been concentrated on the influence of Fintech on banks, but there is a lot more to learn about them.
The infographic that follows is sourced from the most up to date information. It contains everything you want to know about Fintech, and more.