Despite what you may have heard, fintech is not a passing trend. In fact, it's here to stay. The future of banking is being disrupted by fintech, and the banks that embrace it will thrive in the new world order. In this article we'll explore why traditional banks like Wells Fargo (NYSE:WFC), Bank of America (NYSE:BAC) and JPMorgan Chase (NYSE:JPM) are struggling while smaller rivals like Capital One Financial Corporation (NASDAQ:COF) are thriving in an age of financial innovation.A new era of financial services
Fintech is a new era of financial services. It's a disruptive force that's changing the way we think about banking, money and payments.It's not just about the apps you use on your phone or laptop; fintech can also be seen as an umbrella term for various technologies and processes that aim to improve efficiency, security and transparency in financial services.
The big names behind innovation
Big tech companies have been entering the financial services space for years, but their presence is particularly pronounced now. The list of big names includes IBM, Microsoft and Google; Amazon; Apple; Facebook; PayPal; American Express; MasterCard and that's just the beginning of the alphabet!Many of these companies' business models are based on selling products or services to consumers directly through their websites or mobile apps. But they also offer an array of other services (for example: cloud computing) that are relevant to banks as well as other types of businesses.
Transforming the customer experience
Customer experience is the new battleground for banks, and it's a lucrative one.The rise of fintech has meant that traditional banking institutions are facing competition from startups with innovative ideas and innovative ways of doing business. These companies, who often have no physical branches or even employees at all, are able to offer better services at lower prices because they lack many of the overhead costs that come with running brick-and-mortar locations or employing thousands of people. Banks need to find ways to compete in this brave new world and customer experience is one strategy they're turning towards more often than not (in fact, some experts estimate that 80% percent of banks' digital initiatives focus on improving customer service).
IInclusion for the underbanked
The fintech companies that are trying to solve this problem include M-Pesa, Dwolla and TransferWise. These companies provide simple ways for people without bank accounts or credit cards to send money over mobile phones or social media platforms. They also offer tools that allow consumers to budget their money more efficiently, reducing their risk of financial instability and poverty. This can be especially helpful in developing countries where there are fewer financial services available than in developed ones.Inclusion is important because it creates opportunities for entrepreneurship as well as allowing people access to basic needs like healthcare and education at lower costs than traditional banks would charge them (or even free). In addition, having access to a bank account makes it easier for individuals who want mortgages on houses or cars; thus making them less likely candidates for predatory lenders who charge high rates of interest on short-term loans made against collateralized property titles such as cars or homes.
Fintech continues to shape the future of banking, and the banks that will survive are those that embrace it and drive it.
Fintech is changing the way we bank, and it's changing the way banks do business. It's also changing how banks interact with their customers and each other.In this article, I'll discuss what fintech means for consumers and businesses alike, how you can use fintech tools to improve your finances, and why companies like yours should embrace this new technology if they want to survive in 2020 or beyond.
