The battle in between Banks vs Fintech can be considered as one of the most prominent clashes that you can find in the financial industry. Even though the banks have started embracing digital transformation, it is important to see whether this battle has any resemblance with the battle of David vs Goliath.
Table of Contents
Banks Are Resisting Digital Revolution
Banks resist the digital transformation started by Fintech. Hence, it has given life to a clash in the financial industry. This clash can effectively be mitigated if one party can come to a common agreement, but it doesn’t seem to be happening in reality.
Large scale multinational corporate banks and digital focused Fintech companies can be considered as the two major rivals of this battle. The banks have partially agreed to follow the digital transformation trends implemented by Fintech. However, it was a battle that lasted for a long period of time. Hence, people remembered the resemblance in between this battle and the battle.
When banks partner with Fintech companies, it is possible for us to see numerous differences in the traditional products offered by them as well. For example, we will be able to see how banks will go ahead and offer insurance services. As of now, it is not possible for a bank to offer insurance services because their product portfolio is quite limited. But they will be able to take a look at the different insurance products such as commercial insurance with the support that they are receiving from the fintech companies. This can eventually open up numerous outstanding benefits for the different banks that exist out there in the world.
How This Can Benefit Millennials?
If banks get into partnerships with Fintech companies, it would be possible for them to open up doors for millennials. Almost all the millennials who live out there in the world are skeptical about traditional banking methods. This fact is proven from the Future of Finance Report prepared by Goldman Sachs. As per this report, more than 30% of millennials who live out there in the world would not come across the need to make financial transactions with a bank. They would prefer to take it online. Hence, it has become a major concern for the entire banking industry as well.
Advantage Of The Fintech Companies
Fintech companies focus entirely on the digital revolution. Path followed by them has been able to deliver effective results as well. In fact, they have been able to attract investments worth billions of dollars from retail banks. On the other hand, some banks have established digital labs along with traditional agreements in order to take an extra step towards modernization and innovation. Banks that took this step have been able to end up with impressive results. As per the recent reports of Business Insider, 90% of such banks have been able to cut down expenses. Therefore, the winner of the battle seems to be obviously, and it has become important for the banks to follow the trends to survive in the future.
Millennials would be the major customer base of banks in the future. Therefore, it has become essential for the banks to cater their needs. To cater the needs, banks should finalize the approach of moving forward, such as gaining the most out of digital revolution. It is the high time for the banks to think about making these changes accordingly. Otherwise, the banks will come across numerous challenges when they are trying to ensure their survival in the future.