Banks and fintechs in Europe embrace each other and develop meaningful partnerships; otherwise, banks will fail to catch up with fintechs in the technological aspect and become less relevant.
FREMONT, CA: Fintechs are moving out of niche use cases and are beginning to operate at scale. Fintech has unveiled a wealth of possibilities for consumers and businesses. Fintech has also established itself at the core of Europe's business boom and has unsurprisingly captured investors' attention. While the overall reception of fintech from the public has been largely positive, there is a lot of space for improvement. Here is a discussion on the main qualities and challenges that Europe's fintechs will probably have to focus on coming.
Europe has produced many technological innovations and is a hub within the world that would consistently generate innovative technologies. Many European fintech startups have been purchased by firms outside of the continent, and entrepreneurs and innovators focus on keeping the innovation localized. One of the significant flaws of the traditional financial institutions is that their approach is very transactional and is focused primarily on banks. The main reason why fintechs took off so fast is that there was a lack of financial services available for people that would fit their profile. API technology and open banking standards are what pushed the fintechs into their success.
Offering customized services goes far beyond just having access to the client's data. It requires a careful and proper evaluation of what the client might be looking for. Fintechs did an amazing job and managed to create a loyal user-base for themselves. Another aspect is that there is increased access to machine learning and the feasibility of full-stack, vertically-targeted banking platforms. AI is already used in most fintechs and is becoming even more widespread within the industry, and since the trend doesn't seem to be fade and AI has now become an essential part of fintechs. In conclusion, most of the prediction regarding European fintechs is very favorable for the industry.