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Cashless, bankless, seamless – the future of banking may not even have banks in it. Most companies today – especially across retail, big techs, logistics, insurance, telecom – are either becoming fintech companies or will be one soon. By the time we define the word ‘relevant’ for banking, it stands for something else or something more.
Customer needs change, the web goes cookie-less, regulatory landscapes shift, cybersecurity threats get more nuanced, cost envelope reduces, and new-age technology possibilities permeate – everything is happening simultaneously. It is as if multiple futures exist in parallel – not unlike a sci-fi adventure.
In an age of AI-enabled banking, customers expect more intelligence. For internet-natives bred on a steady diet of ‘everything-digital,’ speed, simplicity, context, and convenience are a given. Why should banks be any different?
The competition for traditional banks isn’t Fintechs but gaining traction in customers’ minds (and loyalty) by offering a delightful experience. A few starting points are more product choices, easier onboarding processes, higher protection from fraud and risks, minimizing systemic frictions, and removing human bias in decision-making.
On the one hand, trade barriers and financial protectionism increase, and on the other, the future of global finance grow stronger through global interconnectedness. In the mix are decentralized and an interconnected approach that undoubtedly increases risk and makes regulation and managing crisis more critical.
Currently, these two forces shape and bring in significant amounts of investor money into two segments: Sup tech (supervisor tech) and Reg tech (regulatory tech).
As financial institutions grapple with the challenges of decreasing revenues and increasing costs, the ability to maintain leadership and retain a competitive advantage in a landscape marked by new digital-only banks and Fintechs calls for three things: re-engineering business models, adopting more unique technology stacks and platforms, and integrating with financial technology ecosystem.
Examined closely, all three strategic imperatives rely on a daily rhythm: Digital Operations. Being digital doesn’t stop with customer experience. It’s just the beginning. Actual digital banks leverage new tech for superior customer outcomes.