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Are digital banks and fintech taking over traditional banks?

Banks are currently facing a series of changes that will cause changes in the future of the industry. A challenge for them is to become digitally focused on the experience of their clients, but many have not yet realized the importance of the valuable contribution that their clients expect.

At present, in the banking world, traditional banks are no longer alone. Now, they share a market with digital banks and fintechs. Faced with this reality and user demand, Adrian Ruiz San Valero, Banking Director of Everis, states that “customers choose the service that gives them the best experience and responds to their needs. To the extent that the client trusts the person who provides the service, it will be of little relevance if it is a fintech or a bank regulated by the Central Bank. ”

However, according to the spokesperson, the fintechs and banks that try to win marketshare in isolation, will be those that most likely will not survive. This is due to the fact that a new ecosystem is being formed in which different players compete and complement each other: banks, fintechs, and technology giants such as Amazon, Google, and Facebook.

Banks need to evolve to keep being competitive against apps and software

An example of the co-creation of value is the launch made by Mercado Pago. The same is that your clients can invest their available money in the account after a few steps, making their experience simpler. What’s behind? An agreement with the Industrial Bank and a Common Investment Fund in which this money is invested. But customers do not need to know this technical detail or worry about permanently investing or disinvesting the balance depending on the debits and credits they need to make in the future.

The Industrial Bank added a marketing channel and Mercado Pago created a new service that solves a need of its customers in a simple and transparent way. Both collaborated contributing what they do best to expand the cake instead of competing for a portion. On the other hand, digital channels will have a more prominent place every time.

Both the mobile channel and online banking will continue to grow, as the need for customers to operate at any time and from any place and with other amenities, such as “Coffee-Banks”, is becoming common denominator providing a new experience for the client. Another revolutionary process refers to the keys and consists of replacing the PINs with the combination of new technologies that involve face recognition, voice recognition, iris reading or fingerprinting.

The future remains unpredictable

In short, given the current level of globalization, there is not a single country or market that marks the course of what is to come. The winners will be those banks and fintechs that manage to create long-term alliances that allow uniting the knowledge of the financial instruments and the agility to surprise the clients with a disruptive service.

Also published on Medium.

Published inSaaS

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