The Fintech Revolution posed an inevitable challenge for traditional banks. Globally, US$ 92 billion was invested in fintech in 2022. The USA remains at the top of the leaderboard for global investments in the category, with more than US$ 39 billion in fintech capital.
For 2023, projections indicate that the areas of accounting and payment management will benefit most from these investments. The use of digital currencies for payments is expected to be the future of fintech. These strides have been driven by the desire to make payments safer and faster.
Despite traditionally developing their own platforms to provide banking services, major banks have forged partnerships with fintech companies to take advantage of their more flexible and innovative digital technology. Innovating at big companies is difficult! The positive impact of these partnerships with digital technology labs, such asAlfredus, ensures more efficient financial services.
The biometric sensor, for example, is a fintech innovation used in the banking sector. With this technology, transactions carried out at ATMs have become safer and also more convenient, making it possible to monitor transactions made even without a debit card present.
Banks and investment agencies were also forced to create mobile apps with user-friendly interfaces that recognize the user’s fingerprints. They were also forced to adopt an omnichannel perspective, providing customer service across multiple channels, which reduced the number of physical branches. In 2011, in the United States, a total of 2,927 financial branches were closed.
There is a huge amount of digitization yet to come. The changes brought about by these types of innovation occur quickly. Be it with customer service chatbots, artificial intelligence for fraud detection, online transactions, smart chips and whatever else is yet to come.
The fintech market is just heating up. Consumers are putting their fears to rest, opting to make purchases or investments with just their phones. According to a survey of digital payment consumers by McKinsey, 9 out of 10 Americans already use some form of digital financial transactions. More than two-thirds of them expect to have a digital wallet within two years. In addition, there has been growth in the proportion of consumers who intend to use three or more digital wallets in the coming years: from 18% in 2021 to 30% in 2022. The new habit is not only more convenient, but safer.
Despite all these advances, the year 2023 still holds many surprises. The Federal Reserve is scheduled to launch its instant payment service. This will be the government’s first attempt at real-time payments. The initiative will allow instant payments to be sent through the Fed’s depository institutions, which will give smaller banks a better chance of competing when it comes to payments. Although the initiative is the government’s first foray into the universe of fintech, it certainly will not be the last. Government involvement in the growing fintech space further fuels industry growth and favors market collaboration.
Banks and investment institutions already understand that the time has come to align their digital objectives with the objectives of consumers and third parties alike. According to research by global fintech company Sopra Banking Software, 34% of banks believe that accelerating digital change is a critical priority. Despite this, 49% believe they lack the complete operating model needed for effective transformation.
Cooperation between banks and fintech companies is undoubtedly the best path and brings with it several benefits. In a partnership, the two companies involved are able to take advantage of each other’s existing consumer base and thus expand the power of their reach. Furthermore, if one of the partner companies has a good brand reputation, the other company can benefit and capitalize more by working together.
When a bank creates a digital partnership, the consumer gains the best possible user experience, with a safer, automated process, in addition to data intelligence and operational excellence reserved for few. Consumers, who enter the financial space more quickly, win and increase their possibility of financial return. Banks, which retain customers and increase trust, also win.
Candice Pascoal
Candice Pascoal, CEO of Alfredus, has been named one of the top Digital Authority and Tech Innovation agencies to watch by Entrepreneurs Magazine. Pascoal is a highly sought-after tech innovator with over 20 years of experience in the industry. She has worked with some of the world’s largest organizations and is known for her innovative and transformative approach to digital authority & growth.
Candice has won important awards for UX Innovation, Digital impact (Cartier Awards), and Innovative Communication (Proxxima). Candice has been extensively mentioned in news channels such as New York Times, Forbes, TED and CNN.
Candice Pascoal is counted among the most innovative entrepreneurs in the tech industry. She has been named one of the people that will change how we live and do business in the next 20 years, aside Jorge Paulo Lemman, Justin Trudeau, and Melinda Gates.
Fluent in four languages (English, Portuguese, Spanish and French), Candice began her career in NYC as VP of Global Business at the young age of 23 years old. After that, she headed the international & digital expansion of large American companies in over 120 countries before specializing in the tech industry and being a respected name in the field since 2013.
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