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How Fintech is Shaping the Banking Industry for the Future

How Fintech Is Shaping The Banking Industry For The Future

Innovation in the banking industry continues to be the key factor for financial institutions to survive in today’s digital era. According to recent statistics, 82% of financial organizations say they plan to partner with fintech companies within the next 3-5 years.

Here are just a few ways FinTech is shaping the Banking and Financial Services industry for the future:

Customer-Centricity

The shift to more customer-centric models can be directly attributed to the increase in demand from the younger generations. These consumers want to have quick, efficient transactions done at the palm of their hands. FinTech companies have embraced this. According to PWC, only 53% of people believe that banks and financial institutions are customer-centric, while 80% say that FinTech companies are customer-centric. A recent study shows that 71% of millennials would rather go to the dentist than hear what their bank has to say.

Need for Experts in Fintech Industry

I’ve recently had experience with a couple of Financial Institutions looking for candidates with FinTech industry backgrounds. They’re looking for these candidates to bring their ideas and experience to the bank/credit union scene. Because let’s be honest, not a lot of folks understand the FinTech industry if they’ve been in the banking world for a while. As a result, there has been a huge shift in the need for FinTech skills.

I have helped three different institutions this year alone with their recruiting strategies and large projects aimed towards FinTech developments.

A need to adapt to change, quickly and effectively:

Banks and Credit Unions have been slower to make the change to a more digital-centric model. There are a few reasons why this is the case. The silos within banks and credit unions make it difficult to pivot and adapt to changes in the market. Additionally, it’s challenging to make changes due to the legacy systems they’ve built up over the years. Introducing a new platform or changing systems causes a significant shift. These profound changes and products can directly affect the customers and members of the institution.

One of the financial institutions I helped with FinTech projects had a three-year timeline to switch over to their new FinTech platform. This required an immense amount of strategy planning, technology design, regulatory compliance checks, and other maintenance work for their IT teams. These timelines must be drastically reduced in order to keep up with the ever-changing world we’re in today.

If you’re looking for a FinTech professional to take your initiatives to the next level, let’s have a conversation!

digital age

How the Digital Age is Influencing Financial Institutions

digital age

In the world of IT, data security is a big deal. What is interesting is that according to a recent article in Forbes, financial institutions have established a comfort level with customers, more so than many other industries. Of course, we have been sharing sensitive information with our bank since we opened our first savings account.

However, we are starting to understand the value of our information and asking for more benefits in relation to the data we share. Better interest rates, a wider range of loan offers, even simple recognition demands are expected.

The Digital Age is demanding more integration

Millennials are considered more “tech-savvy” and growing up in the Digital Age is encouraging them to demand more innovative financial services. They want more convenience; they want more integration and features from their phones, or any device, that they carry.

However, it isn’t as simple as you may imagine. The younger generation wants to know that their data is safe, and when there is a problem, they want someone in-person to fix it and fix it now. Mobile features are important, but customers of all ages and demographics still want human interaction.

For example, a bank may offer multiple products and services, depending on the type and size of a business. Consumers are capable of searching a website or mobile app to access these offerings; however, this will never replace the human touch that builds trust and security. Technology is wonderful with training and complicated plumbing without. The physical banking branches thrive in a high tech and high touch environment.

How data is shaping financial institutions

The ability of consumers to trust their bank with personal data protection is what drives loyalty in the financial industry. Security, responsive service, and easy access to the branch (and its features) are important to every generation. In fact, according to the 2018 Cybersecurity Market Report, banks are doubling their spending budgets to the tune of hundreds of millions of dollars. And a lot of this budget is going towards fintech candidates.

Sharing data benefits consumers, but we must remember that it also can leave us vulnerable if not properly protected. Banks continue to grapple with these challenges and look to solve these issues by better understanding the data we share. This creates opportunities and new jobs in many areas that keep expanding as fast as technology itself. There’s a huge shortage of manpower with a lack of people with the necessary skillsets. This is changing the recruitment process of financial institutions, forcing them to rely on recruitment headhunting to find the talent needed to improve integration and ensure consumer data protection.