Fintech Growth – challenges and opportunities for Banks

The financial technology (fintech) sector has been proliferating over the last decade, transforming how we do business, bank, and manage our money. The fintech revolution is driven by digital innovation and changing consumer expectations, with consumers demanding more personalisation and transparency. This article looks at factors influencing the advances in financial technology, challenges and opportunities for Banks.

The rise of mobile payment systems.

The rise of mobile payment systems has been one of the most visible changes in financial technology. Mobile payments are becoming the norm, with both consumers and businesses adopting them at a rapid pace. A global survey on mobile payments by GfK shows that 73% of respondents use their smartphones for some form of payment or other.

There are several reasons why this trend is happening:

1. Contactless payments have become more common; over 80% of millennials have used contactless to make a purchase, and 70% expect their preferred method for buying goods will be via smartphone within five years. This is particularly true for young people who have grown up with smartphones from an early age – so they’re used to making small purchases using their phones and larger ones using debit cards (and perhaps even credit cards).
2. Security concerns around traditional online transactions have pushed many consumers towards paying with cash, but this can be inconvenient if you’re out shopping or dining at restaurants. Hence, it makes sense that people would prefer paying with their phones instead.

The importance of user experience

User experience is the most critical aspect of any product and can make or break a project. Financial technology is no different, and designers must consider the overall experience of using their software or website. There are many aspects to consider when designing a user interface, but we’ll focus on two: how well you understand your users and how much they know what they’re doing while using your product.

You need to know what kind of person you’re building for: What do they want? Where will they be using their device? When will they use it? How often do they use it? Have you considered whether or not this feature should be incorporated into an existing app/website/product already available on the market? If so, who are those products targeted toward—are there any other similar offerings that might help inform design decisions? By knowing who will use your technology and understanding their needs as consumers, developers can create better experiences for them in both usability and aesthetics.

Open banking platforms

Open banking platforms allow banks to share data with third parties. This can create new opportunities for businesses in all sectors and will likely lead to more competition between banks, which means better consumer deals.

Examples of open banking platforms include the UK’s Open Banking Standard, the US’s Consumer Financial Protection Bureau’s proposed rules on data sharing and Australia’s Open Banking Initiative (OBI).

Personalised real-time offers

As consumers’ lives become increasingly complex, banks need to understand how their users live and work to provide real-time support. For example, using data from your mobile device, a bank could offer you a discount on your next coffee run at Starbucks if it knows you’re close by. Real-time offers can also be based on customer behaviour and preferences: A business traveller with an expensive watch might receive a promotion for a weekend stay at an upscale hotel in exchange for his business card number during check-in. Customers need to feel confident that this type of personalised service is worth their trust before they accept it—which means there must be clear communication between the bank’s employees and its customers.

Challenges and opportunities for banks

The financial sector, especially banks, is facing several challenges. The biggest challenge for most banks is transforming their traditional business into digital and mobile banking. The banks need to understand their customers’ needs and expectations and provide them with the best possible experience to stay competitive in this market. According to some experts, it’s also essential for banks to be innovative, creative, and open-minded when dealing with new ideas because these will help them attract more customers who want something better than what they currently have on the market today.

Conclusion

Financial technology is a broad term that includes all types of financial services. The financial services industry is transforming due to new technologies like blockchain and artificial intelligence, as well as regulation changes. As these technologies continue to evolve, they are changing how companies conduct business and interact with their customers.

Financial technology is changing rapidly and creating new opportunities for businesses in all sectors. While it has yet to reach a tipping point, the signs are encouraging. Financial services are one of the most heavily regulated industries in the world. Still, it’s also one that many consumers are desperate to change because they felt disenfranchised by their banks and left behind by technological advances. There is room for innovation, and there will be winners and losers as this market evolves. But with these changes come tremendous opportunities—we must keep our eyes open!.

 _____________________________________________________________

Copyright © Akingate. All Rights Reserved.

See our copyright notice.

Image Credit: Image by rawpixel.com on Freepik  |  Image by starline on Freepik