The past three months have set in motion changes that will not be stopped nor reversed as social distancing measures are gradually relaxed. This is certainly true in the financial services sector, where the lockdown has brought about a watershed moment in the proliferation of FinTech.
by Ammar Akhtar, CEO, Yobota
In the aftermath of the coronavirus pandemic we – consumers, businesses and governments alike – will be living in the “new normal”. We have purportedly witnessed ‘a FinTech revolution’ over the past decade; however, such claims have suddenly been brought into sharp perspective. Only now is the much-lauded transition from a physical world to a digital one going to take shape.
Gathering momentum in the aftermath of the 2008 global financial crisis, the so-called FinTech revolution promised open access to data, hassle-free banking experiences and fairer deals for customers. Yet only relatively small steps have been taken towards this vision.
Until now we have witnessed a cautious adoption of technology in the finance sector as consumers, regulators and established banks familiarise themselves with what it can enable – and this has still come at considerable investment.
Covid-19 has changed this.
Today, people must be able to access advice, take out new products and manage their finances digitally. Financial service providers, meanwhile, must ensure business continuity and a painless customer experience at a time when their teams are unable to work from the office or bank branch.
The pressure is on
At present, many finance companies remain completely reliant on legacy technologies and on-premises servers – they cannot access data or execute processes remotely. Simply put, these firms are under threat of being left behind as society prepares for the new normal.
The pressure is on, with technology no longer just a form of competitive advantage for financial services firms; it is essential to their very existence. And for those now grappling with how to deploy FinTech successfully, two things are key: interoperability and cloud computing.
Over the past decade firms have too often taken a piecemeal approach to adopting FinTech; they have used specific technologies to solve isolated problems. That is because FinTech startups are typically created with that very focused mindset.
Finance firms, particularly those providing banking services, should have a much broader perspective when developing or adopting technology. They must focus on the interoperability of best-in-class technologies – put another way, they must make progressive choices to use technologies that fit together to form entire systems that work together seamlessly.
Take the example of someone applying for a credit card; something that is increasingly common as a result of the economic hardship brought about by Covid-19. There are various different stages that an applicant will need to pass through – identity verification; credit scoring; advice or product recommendation; application and assessment; and, if successful, creating the account.
There are FinTech solutions that can automate each of those processes. Yet the companies best equipped to deliver exceptional services in the post-pandemic landscape will be those that have interoperable cloud-native technologies on a platform that can take the user from the start of the credit card application process to the end as quickly and easily as possible.
FinTech should not be confused with someone checking their account or transferring someone money. These isolated actions are not a true reflection of FinTech’s revolutionary potential, which is quickly becoming apparent.
In the primarily digital environment we are now living in, financial services firms that cannot deliver an exceptional level of service to customers – be it individual or business – risk losing them to those who can. Now is the time for the sector to embrace FinTech to its fullest and build systems that are not just adapted to the new normal, but actually help to shape it.