Fintech start-ups have definitely brought significant disruptions to the way the world banks today, specifically in the areas of payments, credit and personal financial advice. However, emphasis on changes in customer preferences, technology advancements and growing interest in fintech, along with significant investments by the corporate world, have set the platform for an even more radical transformation.
The future of banking will focus on providing cheaper and easier-to-use propositions to end customers. Banks must continue to enhance customer experience through their journey of digital transformation, but instead of undertaking this journey alone, they should partner with Fintech by utilising their innovations in their day-to-day functioning. Upon analysing their core strengths and weaknesses, banks need to associate and partner with Fintech start-ups which can bridge the gaps and thus create a win-win situation for both.
There is the single core message to both banks and fintech—collaboration is key, says the just released CII- a joint study titled ‘Fintech: redefining banking for customers’ .
Incidentally, most of the respondents off the CII-PwC survey believe that consumer banking, payments and remittances, and digital Banking will face the maximum disruption from Fintech. Banks have responded by making FinTech a key part of their business strategy.
Contrary to the popular belief that Fintech will disrupt the existing banking industry, the majority of our survey respondents believed that Fintech would act as a strategic partner to banks. Banks have already started collaborating with Fintech companies with majority of them collaborating with Fintech companies whose services are focused on consumer banking, payments and remittances.
Banks and Fintech stand to gain a lot by collaborating with each other instead of working in silos and attempting to target the same customer segments. In the end it will be us, the customers, who stand to gain the most from this collaboration between banks and Fintech.
Already, investments in Indian Fintech companies growing from 145.1 million USD in 2104 to 1.2 billion USD in 2015 and this is only set to improve in the years ahead. With demographics and social changes, rapid urbanization and shift in global economic power to emerging markets providing further impetus to Fintech growth.