How FinTech is shaping the future of banking
FinTech is booming! The world of finance will no longer be brick banks or investment firms working from spreadsheets and in-person advice, and as FinTech start-ups and financial innovators rush to respond to the demands of the market, various fledgling companies continue to shape the future of finance and leading trends in the industry. With a digitally driven approach, FinTech has not only created new and innovative ways to interact with existing and potential clients to expand banking services, such as investment advice usually reserved for the rich, to everyone, but has also emerged as a lifestyle upgrade for most millennia today.
An overview of the FinTech revolution
The rise of digitization and technologies such as mobile, IoT, augmented reality, virtual reality and blockchain have revolutionized the global market in every segment. According to the current scenario, the FinTech sector is booming with the rise of digital investments. This is clearly an indicator that soon it will continue to thrive in the years to come as well.
Simply, FinTech is a term for the segment at the junction of financial services and digital technology. This is essentially an incentive to use digital technology focused on start-ups and new market entrants that push to innovate in products and services. These days, customers do not choose the services provided by the traditional financial services industry. They are looking for services which can give them quick and prompt response based on their query. FinTech is thus gaining significant momentum in the industry and disrupting the traditional value chain. FinTechs are typically for small start-ups that focus on developing innovative technology solutions such as online banking, mobile payments, big data, alternative finance, and general financial management.
So how has FinTech transformed the banking scenario for customers today? Let us understand.
- Smart solutions – The ever-growing need and the customer’s no-time clause have forced the banking sector to seek quick, abrupt, robust and globally flexible solutions. After observing the current offerings provided by traditional banks, the industry has chosen to rely on FinTech solutions to examine the urgent and targeted needs of customers. FinTech solutions began to develop defined and highly effective solutions for banks that were successful in stepping in and taking over segments that had been overlooked by banks in terms of offerings. A good example, in this case, would be the emergence of online loans.
- Better customer experience – FinTech focuses on merging digital trends with those of customer expectations, resulting in digital customer empowerment. FinTech provides 24/7 access to bank customers and offers services available through the latest digital channels such as social media, internet, mobility, etc. It is estimated that by 2020, social media will become the main means of connection, engagement, information. and understand customers. It will also be the channel where customers will search and compare offers from banks.
- Faster accessibility – Banks are now focusing on increasing the use of open development and software as a service (SaaS) solutions offered by FinTech vendors. This allows banks to strive to easily integrate and streamline operational capabilities in the banking system and processes towards the advantage of mobile delivery. Application Program Interfaces (APIs) enable FinTechs to develop value-added solutions and features that can be easily integrated into banking platforms.
Are our future bankers ready to face the FinTech revolution?
Author, teacher and president of the FinTech Association of Hong Kong, Henri Arslanian, in his TEDx Talk, explores how FinTech is revolutionizing the banking industry to create new, user-friendly financial services. (Look here)
His talk not only examines the ways in which FinTech will change the way consumers access banking services, but also explores how this will extend to those who have access to those services. With so many changes in the banking industry, are the new generation of bankers ready for the digitally driven banking industry? This is the most crucial question to be addressed today.
As FinTech revolutionizes the banking industry and gives millions of people access to financial services for the first time, new banking models are emerging with FinTech startups and tech companies potentially disrupting the status quo. But business schools and universities are not preparing future bankers for these changes, says Henri Arslanian, FinTech thought leader.
The need of the hour is not only to educate finance students, but also to know how to harness the power of technology in finance. We need to start developing the necessary skills from an early age. This will develop the next generation of finance professionals who are well versed in the technology and its potential and who will help propel the industry into the future. To prepare for the future of finance, governments and businesses should invest in domestic talent by partnering with educational institutions to develop FinTech skills. Therefore, incorporating the right education is imperative to prepare students for the financial world they will eventually walk into.
However, the only good news is that Millennials have already managed to weather this change with grace, as most of them have grown up with the management of smart devices, connected homes and e-learning. But in order to train the next generation with the best technological skills, schools must also embrace a technology-focused curriculum model, especially in finance, to elevate them as the next leading innovators in finance.
The bottom line
Finance dominates the world, but soon technology will dominate finance. If you aren’t aware of how technology is already transforming finance, then you are probably falling behind. Plus, if you don’t prepare the next generation of leaders to embrace innovation, you’ll never catch up. As FinTech shifts from an upstart to mainstream, it is vital to prepare students for the future of finance. As Henri Arslanian says, the next generation of bankers may not simply be known as bankers. They must have dynamic knowledge and implementation skills to make a difference in the banking industry. The greatest need of the hour, then, is to shape their financial careers by being designers, programmers and creative thinkers. A first-hand theoretical approach to finance might not be enough!
The opinions expressed in this article are the personal opinion of Sachin Mittal, Founder of Loanwalle.com.