The financial services industry the world over is being redefined by expanding customer expectations for convenience and ease of access. Fintech firms, with an innovative use of technology, are delivering low-cost and instant solutions. This is putting a lot of pressure on banks that are still largely traditional in nature and are struggling to keep up. Forced to rapidly upgrade their services and customer experience, a growing number of banks are embracing collaborations with fintech firms.
A Transformation of the Customer’s Journey Enabled By Innovative Technology
The finance industry today has gone beyond providing the customer with products and services. Fintech firms are streamlining the customer’s journey using emerging technology to create differentiating offerings that make the customer want to keep coming back.
This transformation of financial services is happening largely on four tangents:
- Data focused technologies such as analytics, artificial intelligence, and machine learning, are helping fintech firms better understand who their customers are and what they want.
- Infrastructure enablers such as platformification, cloud-based services, and open APIS, are helping even small fintech firms cater to a relatively broader audience than ever before.
- Operational advancements such as chatbots, Robotic Process Automation (RPA), and Distributed Ledger Technology (DLT) are becoming keys to enhanced efficiency.
- Front End Innovations such as Intuitive User Interface (UI) and interaction tools like augmented and virtual reality, and gamification, are driving convenience and speed in mobile payments solutions the world over.
Fintech firms are providing customers a host of best-in-class offerings, in a faster, cheaper, and more precise manner. With design-based thinking, and simple-to-follow UIs, mobile payments solutions have transformed the customer’s journey to a quick, convenient, and seamless experience. Notably, an estimated 29.4% of global consumers use at least one non-traditional banking alternative.
Rising Expectations and Competition Spur a Customer-Centric Push
The level of convenience and speed that mobile payments solutions are providing the customers has redefined their expectations. Fintech firms are bridging the gap between what the traditional banking infrastructure offers and what the customers currently want. Personalization, quick response, relevance, and seamless delivery are the four key principles that are helping them earn a customer-centric reputation. As more and more innovative solutions continue to enter the market, the competition, of course, is rising.
With fast-pacing innovation and increasing competition, fintechs are challenging the age-old positions that the banking industry has grown comfortable into. Banks, today, are running the risk of losing market share unless they adapt and change their operational models to align themselves with the emerging payments ecosystem. Adjusting to the new model, banks must leverage technologies and modern initiatives to make their approach more customer-centric. Examples of this can be seen in Standard Chartered and Citigroup that have brought out open API developer portals to enable third-party developers to create value-added services like payments that can be integrated with the bank’s offerings.
Partner or Perish: How Banks Are Leveraging Fintech Collaborations
As the existing customer relationships are being challenged by rapidly growing fintech, banks around the world are acknowledging the need for collaboration. This can help both banks and fintech firms leverage each other’s strengths.
A trend of financial institutions partnering with fintech firms to leverage open APIs to enhance customer experience is emerging. Open APIs are pathways that enable two-way movement of data, paving the path to an increasingly connected financial ecosystem. According to the World Retail Banking Report, 78.3% banks are counting on open APIs to help improve their offerings and customer experience. The evidence of this can also be seen in regulatory changes. Europe, a case in point, adopted its second Payment Service Directive in January 2018, pushing financial services industry to leverage Open APIs and enable quick and easy transactions between multiple sources.
Banks exploring the use of blockchain technology to facilitate cross border transactions is another step in the direction of a new payments ecosystem. The Bank of America Merrill Lynch, Standard Chartered, Westpac, Royal Bank of Canada and Santander recently came together to form the Global Payments Steering Group (GPSG), a global blockchain bankers network with payments rules and standards.
The collaboration with banks would also help fintechs by providing them access to bank’s wider and established customer base, extensive distribution capabilities, and regulatory proficiency. As regulatory changes take place in countries around the world, collaborations with the trusted and established banking institutions would help fintechs navigate them with greater ease and efficiency.
OBOPAY: Helping Banks Adopt Mobile Payment Solutions Quicker
Opobay’s technology is helping banks worldwide adopt mobile payments solutions in an effortless manner. By providing them a mobile platform that included the option of peer-to-peer payments, utility bill payments, top-up, DTH, merchant payments, remittances, OBOPAY helps them meet the need for a cash replacement. The platform supports all types of phones and enables card-less ATM withdrawals. Operating on open APIs, and a connector framework, it also helps them meet the necessary regulatory requirements. Additionally, to help the banks gain traction in the mobile money transfer space, OBOPAY creates distribution hierarchy.
OBOPAY’s technology can help banks meet the customer demand of on-the-go banking services and real-time payments. It provides them a solution that can be customized to their needs, is easy to use, and meets the highest security and regulatory standards. This can help banks meet the customer’s changing requirements and be dexterous in a dynamic and competitive market.
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