Fintechs are transforming banking by leveraging technology to offer customer-centric solutions, disrupt traditional financial operations, and enhance accessibility, particularly for millennials and Gen Z. Innovations like blockchain and bank-as-a-service are driving agility and reshaping the banking landscape. As fintechs form partnerships with banks and adopt advanced technologies, the financial services sector is set for significant evolution and growth.

1. 5 Ways FinTech’s are Transforming
Banking

2. Banks have used
technology to deliver
financial services for
decades – Credit cards in
the ’50s, internet banking
in the ’90s, and contactless
payments in the ’00s.
However, the stratospheric
use of technology has only
upped the ante.
Some instances highlight this. Like the Neo banks (Brazil’s Nu Bank,
Berlin’s N26, and the American Chime) operate their complex
operations purely on tech without physical branches.
Innovations that FinTech’s represent are primarily focused on
improving customer-facing facets. The three growth levers that
drive Fintech growth rates are – superior CX driven by the high trust
earned, new-age branding, and marketing approaches, including
gamification and cost optimization possible because of deep
venture capital and leaner virtual operations.
FinTech’s straddles a complex intersection of financial services and
technology sectors that disrupt the traditional value chain.

3. 1. Disintermediation is the most decisive
Fintech impact.
5 Ways FinTech’s are Transforming
Banking
Fintechs have primarily
disrupted consumer banking,
fund transfer & payments, and
consumer & commercial
lending by offering new
customer-centric solutions,
leveraging data and analytics to
enhance interactions, build
trust, and even powering
business outcomes with
sophisticated operational
abilities.
As the industry grapples with changing customer behavior, new
technologies, and new distribution and business models,
Fintechs’ product focus on millennials and Gen Z is characterized
by enhanced accessibility, convenience, and tailored products.

4. 2. With Blockchain technology, Fintech’s game-
changing prowess grows stronger.
As Blockchain tech pushes for a
democratized financial
landscape, Fintechs eye its
unprecedented disruption
potential. Be it through the use
cases of borderless payments,
altering KYC forever, bankless
financial management, and
revolutionary optimization,
Blockchain’s digital ledger
systems attract because of its un-
hackable nature and by removing
third-party intermediaries.
Like ERP software allows functions and entities to optimize
enterprise processes by sharing data and logic, Blockchain enables
entire industries to optimize operations by sharing data between
businesses with competing economic objectives. With
infrastructure cost reduction as a key differentiator, the blockchain
trend will likely throw up the highest Fintech winners in the next
few years.

5. 3. Fintech’s infuse agility like never before
As mentioned earlier, Fintech
innovations reimagine
customer-facing digital
experience blocks. With
advanced self-service
capabilities, Fintechs have
revitalized the customer
banking possibilities. Today
opening new accounts,
applying for loans, buying
insurance, understanding
financial positions, and making
better financial decisions are
seamless activities customers
use and love because of
Fintechs.
These functions (also how mobile wallets ‘ talk’ to banks) are
possible because of API development (Application Program
Interfaces). In the same vein, POS terminals have revolutionized the
way consumers spend and receive funds. Any discussion on agility is
incomplete without acknowledging the growing influence of
conversational banking (or voice bots) and the continual
advancements in user authentication and security.

6. 4. Bank-as-a-service – The change agent of
2020s.
To access the payments system and store money, Fintechs form
banking partnerships. These partnerships are becoming the
product themselves. As several banks enable digital disruptors and
neo-banks to gain access to inexpensive deposits, they earn
valuable fee income. Treasury Prime sells BaaS enablement
software to multiple banks while SynapseFi and Cambr build API
platforms for neo-banks. Along with SaaS Fintechs that offer cost
reductions to banks, the BaaS ecosystem is poised for hyper-
growth.
BaaS is a type of developer
platform designed to
empower fintech
companies. The Bancorp
Bank, BBVA Open Platform,
and Green Dot have
launched their own BaaS
platforms.

7. Fundamentally, Banks sit at the
sweet spot of data and technology.
One disruptive business model
gaining strength is high-technology
companies (Amazon, Google, and
the like) entering the Fintech space.
The two domains, banking and
software development, share similar
concepts – record-keeping, tracking
transactions, and predictive
modeling.
Digital-first companies turn their eyes to banking – Apple’s credit
card, WhatsApp payments, Instagram shopping, Google Pay, and
Facebook’s foray into financial services – are all developments that
point to a more serious future. Expect the resources and
investments to multiply, and the partnerships that aim to scale
growth will transform banking in ways we don’t fathom.
In sum, leading Banks are learning from the Fintech story. The
banking space is poised for exciting developments by encouraging
and incubating internal innovation, creating an agile enterprise,
aggressively digitizing the customer experience, adopting an
entrepreneurial mindset, and overhauling brand positioning to
attract purpose-driven demographics.
5. Technology Players turning Fintechs – The
Maze Multiplies.

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are-transforming-banking/
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