Fintech is booming! The world of finance will no longer be brick-mortar banks or investment firms working off spreadsheets and in-person advisement, and as FinTech start-ups and financial innovators race to meet market demands, various fledgeling businesses continue to shape the future of finance and spearhead trends in the industry. With a digital-first approach, not only has FinTech created new and innovative ways of interacting with existing and potential customers to extend banking services, such as investment advice typically reserved for the wealthy, to everyone, but also emerged as a lifestyle upgrade for most millennials today.
An Overview of FinTech Revolution
The rise of digitization and technologies like mobile, IoT, AR, VR, Blockchain has revolutionized the global market in each segment. As per the current scenario, the FinTech sector is thriving with the rise of digital investment. This clearly is an indicator that soon it will continue to flourish in the coming years too.
Simply put, FinTech is a term for the segment at the juncture of the financial services and digital technology. This basically prompts the use of digital technology that is focused on start-ups and new market entrants pushing to innovate products and services. Nowadays customers do not go for services being provided by the traditional financial services industry. They seek services that can give them a quick and prompt response based on their query. FinTech is thus gaining significant momentum in the industry and causing disruption to the traditional value chain. FinTech usually relates to small start-up enterprise that focuses on developing innovative technological solutions such as online banking, mobile payments, big data, alternative finance, and financial management overall.
So, how has FinTech transformed the banking scenario for customers today? Let us understand.
- Smart Solutions – The ever-growing need and no time clause of customers have forced the banking industry to look for solutions that are quick, abrupt, robust and flexible overall. Having observed the current offerings provided by traditional banks, the industry chose to rely on FinTech solutions to look into the urgent and focused need of customers. FinTech solutions have started to develop defined and highly effective solutions for banks that have managed to step in and take over those segments that had been neglected by banks in terms of offerings. A good example, in this case, would be an emergence of online loans.
- Better customer experience – FinTech emphasizes on merging digital trends with that of customers’ expectation that results in empowering customers digitally. FinTech offers 24/7 access to bank customers and offers services that are available via the latest digital channels such as social media, internet, mobility etc. It is estimated that by 2020, social media will become the primary medium to connect, engage, inform and understand customers. It will also be the channel where customers would research and compare banks’ offerings.
- Quicker Reachability – Banks are now focused on increasing the utilization of open development and Software-as-a-Service (SaaS) solutions being offered by FinTech providers. This allows the banks to put efforts to easily integrate and streamline operational capabilities in the banking system and process toward mobile delivery advantage. The application program interfaces (APIs) enable FinTech to develop value-added solutions and features that can easily be integrated with bank platforms.
Are our future-bankers prepared for facing Fintech revolution?
Author, teacher, and Chairman of the FinTech Association of Hong Kong, Henri Arslanian in his TEDx Talk explores how FinTech is revolutionizing the banking industry to create new user-friendly financial services. (Watch here)
His talk doesn’t just look at the ways FinTech will change how consumers access banking but also explores how it will extend to those who have access to these services. With so much change happening in the banking industry, are the new generation of bankers ready for the digital-first banking industry? That is the most crucial question to be addressed today.
While FinTech is revolutionizing the banking industry and giving millions of people access to financial services for the first time, new banking models are emerging with FinTech start-ups and tech firms potentially disrupting the status quo. But business schools and universities are not preparing future bankers for these changes, says FinTech thought leader Henri Arslanian.
The need of the hour is to not only educate students in finance but also in how to leverage the power of technology in finance. We need to start building the necessary skills at a young age. This will grow the next generation of financial professionals who are well versed in technology and its potential and who will help propel the industry into the future. To prepare for the future of finance, governments and businesses should invest in domestic talent by partnering with educational institutions to develop FinTech skills. Therefore, incorporating the right education is imperative to ready students for the financial world they’ll eventually tread into.
However, the only good news is that the millennial generation has already managed to sail through this shift gracefully because most of them have grown up with handling smart devices, connected homes and online learning. But in order to train the forthcoming generation with the best of the tech skillsets, schools must also adopt a tech-driven pattern of curriculum, especially in finance, to bring them up as the next cutting-edge innovators in finance.
The Bottom Line
Finance rules the world, but soon technology will rule finance. If you’re not aware of how technology is already transforming finance, then you’re probably lagging behind. Moreover, if you’re not preparing the next generation of leaders to embrace innovation, you’re never going to catch up. As FinTech moves from an upstart movement into the mainstream, readying students for the future of finance is vital. Like Henri Arslanian says, the future generation of bankers may not simply be known as bankers. They need to possess dynamic skills of knowledge and implementation to make a difference in the banking industry. The utmost need of the hour, thus, is to shape their financial careers into being designers, programmers and creative thinkers. A first-hand theoretical approach on finance might just not be enough!
Views expressed in this article are the personal opinion of Sachin Mittal, Founder, Loanwalle.com.