How Fintech Reshaped the Financial Service Industry

Md. Meher Ullah • October 14, 2022 • 9 mins read

Fintech is inevitably becoming a huge part of our lives today. The new technology is allowing businesses to develop new products that can more effectively meet client demands for accessibility, convenience, and personalization. What does the financial sector's future hold in light of all these changes?

Here are four unique ways in which fintech is becoming a revolutionary disruption to the financial sectors.

  1. Omni-channel customer experience
  2. Automation for financial advice
  3. Transactions with blockchain and cryptocurrencies
  4. Open innovations for new developments
  5. The future of financing

Omni-channel customer experience

A rapid change in user interactions has occurred as digital channels continue to predominate in how customers contact organizations. Banks have gradually shifted away from old procedures and branch-based operations to operate virtually entirely in digital methods.

In addition to smartphones, an omni-channel experience that satisfies the needs of modern consumers includes social media and other message channels, including email, live chat, and SMS. For businesses wanting to achieve truly customer-centric operations, the necessity to support consumer communication over any channel is indicating the future.

An omni-channel experience for banking users entails consistent and smooth online interactions across all devices, as well as offline encounters with "smart" branches that seamlessly integrate with digital services. With the rise of fintech, financial institutions are becoming smarter as user behaviors change, with the goal of moving transactions and sales to digital channels that contribute to the creation of a unified, improved customer experience.

As a result, fintech firms are rapidly growing in accordance with this trend. They can offer financial institutions the tools they need to integrate multi-channel messaging, along with AI, machine learning, and automations to streamline communication between businesses and consumers.

Co-browsing is one of the most recent technologies that has emerged to help financial services in their path to give omni-channel support, which is another way that this formula has been improved. Agents in the insurance, loan, and financial adviser industries, in addition to banks and credit unions, use this application to co-browse with customers and offer in-person support.

The fundamental benefit of co-browsing is that agents may go along with visitors and customers on particular web pages, stepping in and offering assistance with a show-and-tell strategy during key phases of the buyer's journey, from presale application form completion to post-sale customer onboarding.

Automation for financial advice

Virtual assistance or autobots have taken the world of financial advice by a storm, posing a threat towards the traditional advisors. Traditional advisors may give in to the pressure, but automated financial advice technologies continue to advance and offer competitive alternatives.

The virtual assistance can come in the most popular form of automated responses through live chats and other channels. This may improve customer engagement and satisfaction as the responses are immediate, so that the customers will not have to wait.

A hybrid strategy using both humans and machines can automate the delivery of financial advice. In this industry, automation is used in a wide range of procedures, including the provision of basic advisory services, data-driven insights for more customized services, and automated systems for customer onboarding.

Financial advisors and asset management agents can benefit from automation by capturing leads, fostering customer connections, and providing a wider range of services.

Transactions with blockchain and cryptocurrencies

A significant opportunity for companies in the financial services sector is to adopt a Blockchain strategy in response to the open innovation trend. For the past several years, cryptocurrencies have been upending the banking industry by providing users with easier and less expensive options to execute transactions.

Although we haven't yet seen how this wave affects the industry as a whole in order to assess its long-term effects, it's noteworthy how swiftly it is changing how payments and transactions are done. Customers have benefited from cryptocurrencies for money transfers, cost- and time-saving, and blockchain offers a reliable trading platform with enhanced transparency.

Open innovations for new developments

The emphasis on openness has not changed during the digital shift. Financial behemoths have opened out to outside entrepreneurs and engaged with external solutions in an effort to adopt fresh concepts and innovations.

According to a survey by Accenture, many of the emerging fintech companies' strategies are ingrained with the open philosophy. Fidor Bank in Germany is a real-world example. It developed middleware with an open Application Programming Interface (API) that interfaces to existing banking platforms to provide a range of services, including lending, setting up emergency loans, and sending money via Twitter.

Innovators are increasingly adopting an open strategy, which encourages competition. To expedite procedures like determining affordability, looking up credit, and reporting bank statement information, established banks and credit unions can collaborate with fintech companies offering open banking technologies.

The future of financing

As demands for digital financing services change, the finance sector is being forced to rethink how services and products should be provided. The customer journey is currently covered by fintech advancements such as chatbot technology, machine learning and AI, co-browsing, modern messaging, automation, and more are on the horizon.

In order to offer a more smooth and omnichannel experience, financial institutions and services must maintain a strategy that places the consumer at the center of their activities.

Traditional retail banks will need to keep an eye on the fintech industry's digital transformation as it is being led by challenger firms and startups, and they should look into joint ventures, open innovation, and strategic investments that might greatly enhance their business practices.

October 17, 2022 • 9 mins read
October 17, 2022 • 9 mins read