Tech changes have impacted business; finance is not an exception
Technology advances have a significant impact on our daily life. Internet, social networks, connectivity and mobile devices lead us to an increasingly connected world, which has generated an essential change in the way we relate and communicate. Now it is the users themselves who own their leisure, and the options are almost endless.
The same happens when they interact with companies. We have seen entire industries adapt to this new paradigm, and many others disappear because they are not able to do so. Those industries have been overtaken by the entry of new players who have heard the consumer and met their needs.
The financial industry is no exception, and in recent years we have seen many players with a more technological approach trying to get a portion of the market. According to McKinsey, 60% of the traditional income of the financial sector is at risk in the next ten years.
A new competitive landscape
Before, it was very rare for new players to enter the financial market, and it was unlikely for a company to be worth billions of euros in a few years, with nothing but software. However, in the last 10 years, we have seen companies such as Amazon or Alibaba gain control of a large part of world trade, and they have now set their sights on increasing their financial products offer. The Alipay or Amazon Payments startups are examples of this.
In other industries, we see companies such as Spotify, Airbnb or Uber be sufficiently disruptive to alter the game in the sector for the more traditional companies. Airbnb has removed the foundations of the hotel sector, and Uber has meant a real revolution in city transport, putting the taxi sector on the warpath.
In the case of all these revolutions, the regulatory issue is debatable, but what is indisputable is that current users look for more innovative solutions to their problems, and they don’t hesitate to question the “status quo.” The answer is no longer “it has always been done that way.” And that is what is making us evolve at this pace.
However, banks are acting differently, and they have a smart approach when we talk about their positioning regarding how Fintech will affect their business. According to Capgemini, 91% of banks and 75% of Fintech expect to work together. So, the challenge will be to integrate all the new services they’ll provide together under a unique umbrella that facilitates the provision of a seamless experience for the customer.
In a competitive environment such as the one we have described, banks have to work hard to modernize themselves and offer innovative services and products to their customers throughout their journey. All phases of the customer journey are essential to achieving the final objective: increase customer loyalty, which leads to a higher Net Promoter Score.
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