The hold traditional banking once exerted over consumer finances has seriously eroded in the Digital Age, with fintech presenting a formidable challenge to banking’s sovereignty. Customers are shrugging off any loyalty they may have had to their main banks and are opting for the providers with the most convenient, efficient, secure and, above all, speedy financial solutions. Can banks survive in the fintech world, and if so, how?
The sharing economy is forcing banks to compete with dynamic tech firms outside the traditional financial sector. While competition is key, “Uberization” is also creating opportunities for synergy between banks and P2P platforms.
“The creatures looked outside from pig to man, and from man to pig, and from pig to man again, but already it was impossible to say which was which.” So ends George Orwell’s Animal Farm – a novel all about the danger of becoming that which you set out to oppose.
At the heart of good customer service is responding to customer demands, needs and behaviors—thus banks are finding themselves faced with the necessity of responding to the burgeoning popularity of mobile and peer-to-peer payments amongst especially their younger customers. Hoping it will all go away isn’t an option; so how can banks create their own fast and secure instant-payments systems?
Alternative finance, the marriage of finance with technology, is transforming the financial-services industry by providing lending opportunities through popular vehicles such as peer-to-peer and crowd funding. The decentralization of lending is experiencing explosive growth around the world but especially in developing countries, in which budding entrepreneurs face limited conventional borrowing options.