As the retail banking industry continues to grow, it is adapting to its new challenges by using the right financial technologies.
FREMONT, CA: The simplicity that underlies retail banking products and processes for savings, lending, and business services makes the sector a ripe candidate for disruption. The majority of financial sector executives see retail banking as the one most likely to be disrupted by fintech. New entrants in the industry see opportunity in disaggregating legacy banking components and offering targeted solutions with better servicing to retail consumers and businesses. Fintechs can disrupt market share, margins, information security, and customer churn at higher rates than other financial sectors. Know more here.
Conventional players are still in the early stages of customer-oriented solutions, at least when compared to what Fintechs propose. Only half of the banking sector firms are consumer-centric, compared with fintech players in the industry. By prioritising 24/7 access, fintech offers services available through non-traditional channels like social media, empowering customers immensely. In a few years, social networking sites will be the primary medium for connecting, engaging, informing, and understanding customers and the place where customers research and compare retail banks’ offerings.
A traditional bank ties a customer by providing them several services that make them sticky, through increased switching costs. Without this luxury, specialized fintech companies earn trust through better customer service and referral-based client acquisition—the majority of retail banks site enhanced customer experience as the key to their competitive advantage. Fintech has significantly increased financial service access. It has enabled everyday people to access previously reserved services for the wealthy class, or those with particular economic stature.
The advancement of fintech somehow prevailed over restriction when people started availing fintech services like digital wallets, mobile points of sale, and peer to peer transactions. The advantage of using these services in retail banking is that it is readily accessible from mobile device applications that carry out some digitized versions of transactions. Moreover, it is easy and convenient to use because payment options' centralization results in shorter purchase processing time.