Today, customers expect more innovative, faster and efficient financial services, in terms of money and speed. However, traditional banks have failed to provide these services, partly because of more stringent regulations and heavy legacy core banking systems. In this context, a new category of start-ups has emerged aiming at fulfilling financial services users’ needs. While governments are working on making it easier for consumers to switch bank accounts, banks should focus on providing their clients with the customer-centric services they are longing for.
Fintech could be the opportunity for banks to serve their clients better through white-label solutions or referral agreements, as it faster to implement than to change their legacy core banking systems. Meantime, banks could also conquer new audiences, serving as the backbone to fintech companies addressing markets underserved by banks.
Imagine a one-stop shop banking marketplace where clients are able to use the best, fastest and cheapest banking services, irrespective of the provider. Banks will keep on offering their best services and rely on fintech for the rest. If a bank cannot offer a mortgage to a client, why wouldn’t they be referred to a trusted P2P lending partner, who will fulfil the client’s needs while paying for a referral fee? A new era of a symbiotic bank-fintech relationship is about to emerge, where banks will not only provide fintech with their backbone to operate but also rely on them to serve their clients better.
Furthermore, the frictionless integration of financial services into the digital lifestyle of a bank customer’s life is the technical challenge a bank has to follow, if they want to cope with future developments. It is necessary that a bank acts and thinks as a fintech company, not only as an enabler of fintech but adopting the cultural DNA of it.
According to JP Morgan CEO “We are going to work hard to make our services as seamless and competitive as theirs. And we are also completely comfortable with partnering where it makes sense”, it seems some banks have already realised its potential.