FINTECH and the digitization of Financial Services:
The digital model paradigm
Financial institutions have always been at the forefront of innovation and the use of new technologies in fintech. Not so long ago, the goal was to increase automation and support electronic transactions and payments. The standard approach includes managing customer data and accounts through our banking services or third parties.
The changing habits of customers with more sophisticated requirements are forcing institutions to adapt to an entirely new paradigm. The new digital model rediscovers the customer experience. The rapid change in mobile technology and the need to satisfy customers with a multi-channel sales strategy are putting banks to the test.
Scanning improves the customer experience
A recent study by BT and Avaya called “Ubiquity Finance – Retail Banking” shows that consumers want banks to facilitate digital self-service while seeking help and advice on more complex products. However, there are many interactions that fail: as shown below, 41% of customers trying to resolve a car or home policy issue in digital self-service mode are 48%!
increase sales and revenues from 4% to 16% through better customer relationship management and increased cross-selling of products. For highly standardized and automated financial products such as loans and mortgages, the increase in revenue can reach 30%. The key is to constantly place the customer at the center of new processes to ensure the best user experience. One of the reasons for the outdated user experience is the lack of integrated digitized services.
With outdated IT platforms, isolated departments, the use of fragmented customer data, and inefficient CRM systems, banks are realizing that they urgently need to offer innovative services, otherwise they will lose customers. Customer loyalty is declining as an irreversible consequence of digitization. With new technologies, fintech companies and new online banks can offer better features and a complete customer experience.
This trend also extends to private banking, where new service delivery models are being developed to provide digital asset management services across multiple channels. New regulations, such as the revised European Payment Services Directive (PSD2), are accelerating innovation and perhaps disrupting the banking industry in favor of Fintech solutions that can provide value-added services by logging into multiple consumer bank accounts.
The challenge for traditional banks is the need to change their approach to digitization, focus on the back office and redesign the customer lifecycle. One way to achieve this is to leverage technologies such as artificial intelligence, Robo Advisor, Blockchain, API, and analytics. Banks can learn from Fintech how to succeed with agile business innovation and vice versa. Fintech can learn from banks how best to respond to this complex and highly regulated market.
Fintech Fintech Bridge Bank
companies should be seen as potential partners, not threats to traditional financial institutions. Today, a third of banks have already acquired a minority stake in a Fintech company, but most banks are still trying to figure out which Fintech can best support their digitization strategy. On the other hand, Fintech struggles to find the right contacts in the banking and customer community. The bridge between financial institutions and Fintech companies is becoming increasingly important. but it has a strong presence in the financial services industry and serves as an “interface” for an expert advisor.