5 Myths About FinTech Banking
The ecosystem of the financial industry is changing tremendously. Fintech startups have earned a great success in the financial words and nowadays the words digitization, the blockchain, platform, transformation, augmented, cryptocurrency, biometrics, omnichannel and disruption don’t sound surprisingly as they might have sounded years ago.
Many large startups made a lot of noise around this new terminology. Needless to say that it can be convenient to use the benefits of this relatively new system. Yet, are there any advantages for the marketplace to use fintech substantially? The majority is yet to understand how to use online banking and loan options to their benefit. Here we’ve decided to break down 5 most controversial myths about the role of fintech banking.
Myth #1: Technology Is the Priority
Bankers might consider it’s all about using new and modernized technologies, but in reality, it’s all about the original goal of the banking business – ensuring customers’ convenience and simplify in performing financial operations and not the whole concept of synchronizing new technology with the work of banks.
After all, the main priority for bankers is the consumer, therefore they must be in charge of creating new tools and opportunities to help people deal with finances quickly and secure.
Myth #2: Consumers Support FinTech More
Even though there are thousands of startuppers with fully-prepared digital inventions to ease the life, many of them still need to be advanced in their range of financial services. This small disadvantage makes consumers turn away from those products and look for something more convenient and resourceful.
To prove the fact, the German digital-first bank Number26 closed some of the accounts because the services out there didn’t work the way it was planned.
Myth #3: Traditional Banking System Works Really Poor
No doubt, the old traditional banks have outdated and slow legacy systems, not to say they’re still counting on manual and paper-based operations. Supported by more than several decades, the system doesn’t seem to fall down until we’re offered a new reliable and modernized system instead.
Is today the right time for a change? Unfortunately, most of the banking institutions are not even going to build the new digital banking platform with high-end features, even though their financial opportunities definitely allow them to do it.
Nevertheless, besides money, banks also have one more important advantage, which is a strong customer base. It allows them to implant their business changes much faster and effectively than any other startup digital company.
Myth #4: Digital Banks Must Be a Unique Project
Any revolution changes imply changing the system completely and making new original startup projects with unrecognizable names, as the way of showing their uniqueness. Not to say, most of them have a strong bond with each other (for example, TD Bank cooperates with Moven). Here comes an issue: traditional banks suffer from the lack of technology, meanwhile, fintech startups have an unstable number of clients.
Herewith, according to latest statistics, traditional banks with strong digital platforms have the highest customer satisfaction index. So, maybe there’s a sense in building digital banks around the already existing reputable brand?
Myth #5: FinTech Projects Have a Good Social Media Strategy
Since many millennials consume information mostly from social media, fintech startuppers use this thing to attract people and stay closer to their friends.
But the reality says: not many consumers ever want to build this kind of a relationship with their digital bank providers because this doesn’t really facilitate their banking transactions. And who said that traditional banks can’t do the same? Since most of them have a strong customer base, banks ensure they stay connected to their customers through direct communication, which is in fact very effective.
Certainly, telephone calls may sound a little outdated against powerful social media tools which help to handle services and create a solid brand. But other than that it has no particular advantage in comparison to an old banking system of direct communication.
So, what’s so special about fintech banking to make it so popular? Perhaps, the reason is their opportunity to deliver banking products and providing services fast and at a very low cost. Yet, the new technology wouldn’t satisfy the needs of consumers without their cooperation with traditional bankers.