Technology has caused a significant disruption in the financial sector. This innovation is facilitating better and simpler ways of dealing with the major business problems. Most importantly, it is playing a huge role in ensuring a better relationship with customers.
A considerable amount of the disruption happening in the market comes from innovations that are modeled around the specific hardships and problems being experienced in the market. As such, markets in different regions have unique Fintech solutions. While traditional financial firms have shown some aversion to this technology, it has proved that it is just getting started and the future holds more surprises.
The market is welcoming the disruption
Around the world, the investments in Fintech solutions have grown significantly, and this indicates that this market is ripe for disruptions. Considering the history of the financial industry, an innovation has to be quite interesting to stand the test of time and enjoy wide acceptance.
It’s plain to see that traditional financial systems are being challenged and most banks feel that the status quo is no longer a sufficient fortress. While it can be challenging to topple established firms, the market needs can dictate who survives and who doesn’t. As such, banks that are still reluctant to incorporate the technology into their system can still work with Fintech startups and serve their clients better.
In fact, some banks have already forged relationships with Fintech innovators, and the collaboration is thriving. In itself, this is a good move since most traditional organizations face time and specialized skill limitations.
Unlike in the past, financial organizations are expected to be open about the rates and fees they charge their customers. Previously, traditional banks were used to imposing undisclosed fees and interest rates to their clients. In fact, it wasn’t easy to find the information about the real costs of borrowing.
Besides the legal requirements about the transparency, the customers in the financial sector have become quite sophisticated. As such, they understand their rights and demand to be given the best service. Fintech firms have come up with appropriate technology to cope with these changes that reveal the terms and costs of borrowing to the client. Also, you can ask any question related to the instant approval loan thanks to the chatbots.
The application of blockchain technology in the financial sector makes it possible for participating parties to see real-time information about the transactions taking place. To make the deal better, any changes made on the transaction are clearly visible to all parties hence more transparency on the transactions taking place.
Embracing the regulations
While the financial industry is faced with many regulations, embracing the Fintech innovations can prove to be fruitful in the long-run. Of course, the regulations might seem to introduce a lot of pressure to existing businesses. But at the same time, remember that these rules are being enforced to create a better experience for the users.
For a financial firm to benefit from this innovation, it’s necessary to explore beyond existing hardships and figure out how to turn it into an opportunity. As a result, it becomes easy to instill confidence in the customers as well as the regulators.
For instance, GDPR has been a hot topic for some time, but not many businesses have explored the beneficial aspects of the regulation. If this issue is tackled from the right approach, it is possible for financial organizations to improve their operational efficiencies as well as streamline the business processes that were quite complex to handle.
Improved user experience
A lot of Fintech startups are making huge investments to develop better solutions. The main reason behind the massive investments is to come up with ways of giving the customers an improved experience.
The leaders in Fintech innovation have taken their time to map out and understand all the stages of the customer journey. As a result, the solutions designed are meant to create a smooth customer journey that emphasizes on giving the client an outstanding experience. Basically, giving your customers a great experience means doing more than offering a good physical product. At times, ensuring your organization is offering an outstanding customer service can go a long way in winning more customers.
When financial firms embrace Fintech in their business models, it becomes quite easy to go beyond the service scope of traditional banks. Therefore, it can be easier to implement important business aspects such as quick dispute resolution, transparency, and customer support.
Accurate decision making
Adaptation of the efficient blockchain technology is a major reason why financial organizations must embrace the innovation. With machine learning and advanced algorithms, it’s possible to make better and faster decisions.
To illustrate the issue; traditional bank clients are more likely to encounter some sort of bias since the lending decisions are made by humans. Basically, it’s almost impossible to avert bias when people are intensively involved in the decision-making process.
Today, the Fintech innovation has made it possible to collect a significant amount of customer data. The collected information is fed into the systems that employ clever algorithms to make decisions. This makes the decision-making process accurate and quite fast.
Fintech is making a lasting change in the business landscape
The financial technology is evolving at a fast rate, and it is affecting a wide spectrum of business aspects. Irrespective of the industry where the Fintech innovation is being applied, both speed and accessibility remain the most attractive features of the technology.
To both consumers and businesses that are served by Fintech, the benefits remain almost the same since improved customer experience is the main focus. As the innovations advance, it is now easier for firms to own sophisticated software for big data computing with cloud connectivity. Previously, it was almost impossible to lay hands on such innovation due to the cost implications involved.
The dissemination of information with real-time notifications has supplied business executives with sound insight which is necessary for decision making. As such, marketing executives in an organization can alter and update their lead generation strategies to maximize any existing opportunities. At the same time, customers can also enjoy the same benefits since they can get access to updated information and get personalized service.
Over the last few years, most conventional banks viewed the Fintech innovation as a stage for competitors in the industry. Nevertheless, those that have embraced this technology have realized the potential benefits they can gain.
While some traditional financial firms experience adaptation challenges, it’s important that they embrace innovations that can help them deal with chronic industry problems. When it’s not feasible for an established firm to get involved directly in developing the technology, it’s possible to form a partnership with appropriate Fintech startup.