Banks shouldn’t perceive Fintech firms as rivals or competitors anymore. On the contrary, they should adopt Fintech solutions for the benefit of modern, digital consumers. If banks collaborate with banks or credit unions for that matter, it will result in increased revenues, create opportunities for new business, and take customer service to the next level. There is no doubt about the same.
Today, banks and credit unions must understand that Fintech solutions will not result in threats but lead to opportunities galore. It also does not mean the death of traditional banks and lending institutions. There is no need to become a big shot to join the financial technology bandwagon. On the contrary, smaller firms can be more flexible in embracing Fintech. That is because they have a simple infrastructure and can implement new rules faster than the big shots in the industry.
Additionally, banks and local credit unions may collaborate with core service providers to package a gamut of financial tech products to serve them as well as the consumers in the best possible way. The bigger players in banking have proprietary systems that do not have curated and dynamic assets owned by the core providers.
According to an article published on https://www.inc.com, Fintech companies have a bright future ahead because they are leveraging technologies such as artificial intelligence and blockchain to change traditional financial services for the benefit of consumers. Fintech can provide many advantages to financial institutions. Read on to learn more about how Fintech firms benefit banks and credit unions.
Customer retention and preference
When it comes to Fintech solutions, they help the legacy financial organizations to enhance customer retention as well as preference. As far as data enrichment is concerned, it is perceived as a robust tool that credible Fintech companies bring to the table. There is no doubt about the same.
Improves the health of traditional banks
Fintech firms help to improve the health of traditional banks. You might be wondering how. It does so by improving performance and enhancing the profitability of the banks. Therefore, banks and credit unions must look at Fintech firms like partners instead of rivals selling products. If they do so, the whole journey would become smooth, thus creating opportunities for growth and expansion. There is no doubt about the same.
Solves industry-related problems
When a Fintech partnership happens, it will help in solving industry-related problems and pain points such as money transfer, credit card processing, and ensuring fast loan processing.
When the partnership is strong, conventional banks and credit unions can make the most out of state-of-the-art facilities and secured network. It will help to manage lengthy and time-consuming tasks effortlessly and fast.
Improve loan-portfolio diversification
Yes, Fintech solutions help in improving loan-portfolio diversification. When you get an opportunity to become more granular with your consumer, you will possibly discover and provide the precise products they are looking for, and when customers need them the most.
Provides insights into customers’ activities
Fintech data provides traditional banks and lending institutions a deeper insight into what their customers are doing, especially with their money. It proves how powerful data enrichment is and the benefit of collaborating with Fintech firms.
Additionally, leveraging the power of cloud-based technology is another aspect that reputed Fintech firms have used. The firms use the cloud as a tool to deliver product offers and customized services to meet the requirements of customers in real time. Besides, if you want to read more about Fintech, you can visit sites like https://www.libertylending.com/ or similar platforms.
Why Fintech is a true friend?
Fintech solutions are not the foe of traditional banks and credit unions. They are your friends that genuinely want to develop themselves into the foundation of the financial space. Fintech firms are facilitators and not competitors. That is what all traditional banks and credit unions must understand and embrace Fintech. They are the tech partners and not challenges or difficulties in the path of banks or unions.
Today, banks, credit unions, and Fintech firms must commit to providing outstanding banking experiences to the customers. The partnership and collaboration will help to build even better experiences for the consumers than working solo. It is all about stealing the market share, thus creating a new paradigm for all.
The onset of a successful digital transformation journey
When new and innovative technologies take place of the new ones, the basic institutional values do not change. It remains the same. The perfect example is the arrival of radio, but it never meant the death of the newspaper.
The new technologies were absorbed in the financial space and never displaced. The same rule holds when it comes to Fintech and banks. Based on a recent study by a management consultant company, Bain & Co showed some interesting facts and stat. The customers using banking apps grew from 32 percent 52 percent between 2012 and 2015. However, the percentage increased to merely 55 percent in 2016.
It is true that people embrace new technologies and then understand its values and benefits. Once they are confident that it is beneficial, they embrace the technology to make their lives easy and convenient. They usually do not exchange one thing with another one completely.
Effect on the millennial generation
Based on the findings of JD Power, the digital, millennial generation relies on traditional banks. The data showed that 71 percent of them used a branch service, at least making 11 visits every year. There is no doubt about the same. Again, 78 percent of new bank accounts are opened through a branch, as per the data.
The millennial generation is happy using both traditional services as well as digital ones in comparison to using just the branch or only the digital medium. It means that they maintain a balance when it comes to the use of banking services.
Conclusion
The key to the success of traditional banking and Fintech companies is finding the perfect mix of both. One must use the reliable and time-tested methods of banks and Fintech firms to benefits themselves as well as the consumers. It should be a win-win situation for both Fintech and banks.
