Why fintech has become ‘the new normal’
If you thought fintech companies were still up-and-coming challengers to the traditional financial services industry, the results of a recent survey by deVere Group may come as some surprise.
Far from just ‘making their mark’, more than half of banking and financial services customers around the world now use fintech products or services.
What is fintech?
While the word ‘fintech’ is fairly catchall (and let’s admit, of the buzzword ilk), it refers to the increasing use of computer programs and apps that automate the delivery and use of financial services.
Targeting both businesses and consumers, fintech companies seek to enchance and simplify the customer experience with technology. This new market’s success is arguably as much to do with its characterization as the antithesis of corporate, incumbent banking, as it is to with cutting-edge algorithms.
Fintech leaders, such as Flywire and YapStone, offer convenience and personalization, frequently to a mobile-centric userbase— creating extra value for customers with tailored financial advice, low-interest loans, and free international transactions.
The rise of fintech
According to the global poll of close to 900 people from the UK, Europe, Asia, Africa, Latin America, and Australasia, 55 percent of respondents said they “regularly use financial technology to access and manage their money.”
Commenting on the findings, deVere Group founder and CEO, Nigel Green, said that figure would have been a lot lower, even just “two or three years ago”. He added that the figure reflected the “staggering rate of the digitalization of our everyday lives.”
“And it is speeding up. From self-driving cars, genetic bio-editing to AI, new technologies are beginning to impact every part of our lives. Our financial lives are no exception,” said Green. “We’re in a new age.”
On how they use fintech products and services, more than two-thirds (67 percent), said they use apps to send remittances and money transfers.
Nearly half (46 percent), meanwhile, said they use fintech companies to track investments or accounts, and 28 percent said they used them for storing and managing cryptocurrencies.
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Fintech and CX
While traditional financial services have advanced themselves in recent years, they lack the agility to reimagine their product’s customer experience in a way to be competitive with new entrants that are built around it, front and center.
In the ‘age of digitization’, stellar CX is not a ‘nice-to-have’— it’s simply an expectation of customers today— there is no room for long waits, complex processes or added fees.
“In broad terms, [good CX] means immediate, on-the-go, 24/7 access to, use and management of their money,” said Green. “It means personalized, on-demand services. It means lower costs.”
As the fintech market’s “disruptive presence” continues to proliferate, the trend is poised to grow as ‘digital natives’ make up a larger part of the workforce, and comprise more influential positions in society.
Among the growth trends uncovered, deVere Group also found that emerging markets in Asia, Latin America, and Africa were becoming the sector’s biggest potential markets.
“This could be due to fintech companies typically offering more inexpensive solutions compared to traditional financial services,” said Green.
“Also because these areas are home to many of the world’s 1.7 billion unbanked or underbanked population – those who don’t have access to or have limited access to financial institutions – and fintech allows this issue to be overcome.”
Here to stay
Calling fintech the “new normal”, Green said its rise was a positive force in the world of finance.
“First, it is meeting a clear and growing client demand for on-the-go services.
“Second, it is speeding up the advance of financial inclusion across the world. Helping individuals and companies successfully manage, save and invest their money will only result in a better society for us all.
“And third, it gives firms the opportunity to diversify, cut costs, meet regulatory requirements and improve the client experience, which will help build long-term relationships and trust.”