Competition is intensifying in the banking sector, with fintech start-ups, technology giants and social-media leaders targeting various parts of the financial-services profit pool.
The banking and insurance industries are dominated by well-known companies that are deeply embedded in the consumer consciousness. However, as technology has evolved, the competition from startups has intensified.
How can banks and financial institutions get through to the generation born in the 1980s and 1990s, the so-called “millennials”, also known as Generation Y, given their shorter attention spans and distrust of brand loyalty?
Anyone working in banking knows that customer expectations are charging ahead at full throttle, fuelled by technology advances. Fortunately banks can use innovations such as AI and IoT to meet customers where they are at, and a recent Fujitsu report shows they are doing—or planning to do—just that. So what can we reasonably expect banking to become as a result of this transformative process?
2017 has been a good year for US stock-market indices, in large measure due to the staggering performances of the Big Five of the technology sector, which are hitting levels not seen since the dotcom boom 20 years ago. Characterized by unmatched success in such areas as platform strength, innovation reinvestment, acquisitions and talent attraction, these technology giants seem guaranteed to keep on winning.
People don’t trust banks. And they don’t trust insurers either. In fact, they don’t trust financial institutions, full stop. So when you’re a financial services provider, generally speaking, you’re not starting from a position of power in any high-street best-loved list.
The so-called Fintech Revolution has drawn much commentary from the media and filled bank managers with dread of the threats posed by new fintech challengers, but is it really all that revolutionary? Even if it is not, progress is being made toward a more open financial sector that fosters healthy competition and innovation.