At one point, banks seemed invulnerable. They had the money, the power, and the will do to whatever they wanted to without too much concern for rival financial technologies. Now, however, there are many issues facing banks from up and coming fintech companies.
Customers want to be able to use the latest technologies to access their accounts and pay for goods and services. Some predict that the world is on an inevitable journey towards a cashless society. While that may still be a way off, it’s certain that people want choice when it comes to payment methods, they want to be able to bank using their phone and anyone who doesn’t keep up with this demand, may get left behind.
All of this has to be married with adherence to the ever present regulations surrounding the financial world. For companies like Alliance Bernstein, Morgan Chase, and other financial institutions, transparency has to be balanced with confidentiality and this requires investment. Algomi is a good example of a company that is meeting this challenge head on but banks have yet to catch up.
With all the new technology, more threats to cybersecurity are inevitable. It’s a real concern for everyone – banks, traders, and even software providers like Algomi. Investment in security measures has to equal the investment in technology. A serious security breach can irreparably damage customer confidence even though, ironically, the bank is likely to be safer than its rivals after addressing any issue arising from an attack.
The movement of money used to be the sole purview of banks. Now customers have options that become more apparent and radical all the time. Even within well-established fintech firms like PayPal and Algomi, investment is consistently made in new developments. Banks need to keep up to compete.
The user experience of banking needs to be simple and yet personalised. Plus, it’s still important to customers to feel like they are getting something out of the relationship such as rewards or advice. Where customers used to feel a sense of loyalty and benefit from sticking with the same financial institution, now people can be persuaded to move on for cash bonuses or temporarily fixed interest rates.