It’s the year 2020. Two decades past Y2K*. The industry that was once dominated by classical banks with a broad portfolio is now seeing the strengths of neo banks, fintech and the like. Since the worldwide COVID-19 pandemic hit, it has become clearer than before how important it is for this industry to innovate – not in the future, but now.
Pre-pandemic digitalization
There has been a lot of talk about the digitalization of banking services for a while now. And trends show that digital or mobile banking has been picking up speed. Consumers have adopted this as a mass trend now.
3 out of 4 global consumers use a money transfer or FinTech product
– EY, Global FinTech Adoption Index 2019
3 out of 4 global consumers use a money transfer or FinTech product
– EY, Global FinTech Adoption Index 2019
Even in Europe, where digital banking has always been lagging in comparison to the American and Asian counterparts, it is clear that the venture capitalists identify a good deal of potential in the market. Not only has the amount of investment in fintech companies consistently increased in the last 5 years, it has also reached a new high.
The cherry on top: Our client, a German fintech Fidor Bank, has emerged third in the list of World’s Best Banks. As a digital bank, Fidor focuses solely on the virtual world. Fidor is one of the first banks to offer customers a payment system via SMS and e-mail, back in 2010, followed by an integrated credit and debit card in 2015, and thereafter making it a Flagship Start Up in the fintech industry. (Our heartiest congratulations!)
Global pandemic and consumer needs
Since the corona epidemic hit, many things have changed. There is now duly respect for healthcare workers and others in “system-relevant” workplaces (e.g. supermarket, logistics). Parents appreciate teachers more. Home office becomes a newly accepted norm.
What’s clear is that money is still needed for most things to function. Therefore, there have been accelerated changes in the way we deal with money. Online banking and mobile payment are the new normal. While contactless payment was once seen as an unnecessary risk, it has today become the ideal. Consumer needs have changed, and thus financial players have to adapt – and not just to survive, but to thrive.
A greater push to be digital, innovative and agile now
With the pandemic, the trend towards digital financial services is affirmed and the change is accelerated. Financial service providers can no longer afford to sit still and wait.
Innovative and seamless digital banking capabilities are paramount in a business where basic financial products have become commoditized and rock-bottom interest rates make it hard for lenders to differentiate.
– Forbes, The World’s Best Banks: The Future Of Banking Is Digital After Coronavirus
Innovative and seamless digital banking capabilities are paramount in a business where basic financial products have become commoditized and rock-bottom interest rates make it hard for lenders to differentiate.
– Forbes, The World’s Best Banks: The Future Of Banking Is Digital After Coronavirus
Adapting to these changes doesn’t have to be hard. With the right technology to support your move towards agility and innovation, you can easily do the following:
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Work with strategic partners for your business
Partnering strategic companies for their technical innovation, their reach or their products to broaden your portfolio can be a smart way to innovate than starting from scratch.
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Keep up with consumer needs
This has two aspects to it: Studying purchase behaviour to adjust your marketing activities to a bigger piece of the pie, as well as seeing the potential in your current customers for their lifetime value instead of their individual transactions.
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Remain secure when it comes to data
When it comes to collecting and analysing data concerning your customers’ behaviour, it is key to ensure your IT infrastructure supports your sensitivity to data, particularly in this industry. This means ensuring IT security, ensuring GDPR-compliant tracking, as well as maintaining data sovereignty, so your data remains yours.
Interested in these steps above? We have a platform that has already helped several other financial players. Learn more by clicking on the banner below or get in touch with us now!
*Y2K is the short form for the year 2000, the year where many feared for a millenium bug with the year switching to ‘00 in the digital calendars.
