For years, the banking industry has been in the middle of a pretty massive level of change. For many, banks are needlessly confusing and often fill up their help pages and services with jargon.
The confusing nature of banking means that many people are looking to more customer-friendly means of improving their banking experience. For example, most people today would like to use an automated banking assistant instead of having to go and sit in person with a banking representative.
Financial technology, or fintech, is going to change the entire banking industry.
And it’s been estimated via the 2019 Global Payments Survey by Accenture that banks who don’t make the move to fintech will fail. Indeed, they could see as much as 15% of payments revenue drop off their bottom line within a few short years.
Why? Because fintech is beginning to make sure that customers have access to the solutions they don’t have in their normal banking ranches.
Indeed, the threat that many banks fear from technology firms is already proving to be a reality. They’ve seen the fintech industry grow rapidly, with over 800 deals done between 2016 and 2018.
It’s expected that this will continue to grow in the near future, with more and more reports showing that banks simply don’t have the monopoly on financial advice that they one did.
Indeed, with projected changes to come in the way that technology and regulation go hand-in-hand, banks who aren’t willing to utilise the growing fintech market are going to suffer from failing to do so.
Every trend points to a new industry – one that is more about giving customers information based on what they are doing, not what the bank thinks they should be doing.
One of the main reasons why fintech is so important is that customers feel more loyal to firms using fintech. They know that their bank has invested in solutions to make their own lives easier.
Therefore, customers are more likely to stick around, keep on using that particular banking service, and keep on coming back for more in the near future. That’s a big reason why banks are in a do-or-die situation; if they fail to adapt and use fintech, they will simply miss out to their competition.
Indeed, it’s expected that an annual growth rate of around 4% could take place in the industry over each of the next four years. This means that banks still have time to adapt and change – if they don’t, though, they could see once loyal customers moving on and going to banks that do offer fintech.
The days of simply going with what the bank said are long gone. Today, people want to be using financial technology that gives them unbiased advice, and makes managing their financial future easier. If banks don’t start adding in more tools to do that for customers, they’ll pay for it in user losses.