Every organization within the financial industry will be fully aware of the existence of FinTech, many even struggling under the huge pressure that it proposes. Whilst many banks may be in denial about the potential effects of the new technology, the truth is that it’s heavily disrupting these financial institutions, and it’s definitely isn’t going anywhere soon – or ever. Embracing FinTech may be one of the only ways to progress as a traditional bank due to all of the advantages that it offers customers. Groups such as NEX are able to help companies to prepare themselves for the transformation that FinTech will have on the industry, allowing them to adapt to the changes and incorporate them into their services. So, why is FinTech here to stay?
Technology Is Always Evolving
Now that we live in a modern era, completely captivated by the revolutionizing effect that technology has in every industry, there’s no denying that technology is just going to get bigger and better. FinTech is already in its digital phase, where FinTech start-ups are able to improve the experience for financial users, as well as enforce more transparent practices to gain the trust of potential customers. The emergence of technology has properly changed the way that people manage their finances, from crowd-funding facilities to the opportunity to complete transactions through the simple use of your mobile phone. With millions of transactions completed this way every year, FinTech won’t be going anywhere soon thanks to the customers.
Customers Have More Control
So why are the customers so important? Well, now that FinTech is well integrated into the financial industry, customers are beginning to have more control over their finances and the services that they use to manage them. FinTech is favored for taking a personalized approach to customers, ensuring that they have a variety of payment options available to them, matching their requirements. When visiting the traditional banks, these services are very rarely available to you, and therefore with customers in power, banks are at a high risk of closing down, but how serious has this become?
Profits Are Already Declining
They have become quite serious, to be truthful. Statistics have already emerged regarding the success of banks in the future due to the presence of FinTech, and it isn’t in the banks’ favor at all. The weight of FinTech is weighing down very heavily on the shoulders of banks, with profits expected to decline by 20% to 60% by 2025, unless they evolve their services and up their game to the same standard as emerging FinTech start-ups. We have seen banks trying to transform the services that they offer customers to replicate those provided by FinTech start-ups, however, most of these attempts have proven unsuccessful, with new and existing customers preferring the opportunities available with the FinTech organizations.
Blockchain Has Revolutionised The Industry
When it comes to the safety and security of digital banking, many groups have been increasingly skeptical. However, with digitalization only on the way up from here, this method of banking and managing finance isn’t going away – so what’s the solution? Well, blockchain has the ability to entirely overhaul the financial services industry, in fact, it’s already on its way of doing so thanks to its smart and innovative decentralized ledger technology. As this type of technology could decrease the cost of financial services to a figure much closer to zero, the effects on banks would be massive. As a result of the usefulness of this technology, we can certainly expect it to be staying around for the long haul.
Of course, traditional banks aren’t going anywhere just yet, but it’s safe to say that FinTech is here to stay forever. We can’t completely confirm the effect that it will have in the financial services sector, but what we do know is that it will change the lives of all involved forever.