For the last few decades, banks and finance sector had been working on a similar, highly static model and were earning huge profits while being negligent of consumer issues and paying no heed to their sorrows. Banking and Finance sector had no competition. They almost enjoyed the monopoly which made them indifferent and stale. With the new disruptions in technology sector, all of it is beginning to change. Banking and finance sectors are being challenged by newer and aggressive players and are facing difficulties in surviving. The banking and finance sector is no longer the same old slow chap anymore.
Various innovations like digital currencies, crowdfunding facilities, mobile payments, peer-to-peer payments, etc. are growing both in terms of stature and usability. The fact that the banking and finance sector has been challenged before but the challenge was short lived and could not bear any fruit, cannot be denied, but this time it’s different. Previous challenges were halted due to lack of innovation, regulatory issues and many other problems. Today, almost all of these factors have been eradicated.
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Previous innovators made the mistake of replicating the banking and finance model in its entirety. Today, the innovators are more concerned about ‘bridging the gap’ i.e. they have studied the main issues that the consumers face and have tried to create the solutions to these problems. They are no longer replicating the banking and finance sector. They are creating a niche for their own business.
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“Take the example of digital currency and the changes that it has brought to the table. The paper currency is regulated by market regulators which varies from market to market. Further making international transactions is nothing less than a headache. You have to pay a lot of amount cleverly hidden under various financial terms to make a successful transaction. With digital currency, there are almost negligible charges and the transaction is hassle-free. Do you see the change?”
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These new players have made smart choices. Crowdfunding services has helped in the growth of thousands of seed-stage businesses and they let the consumers decide if they are willing to trust a particular idea or not. They have leveraged the right of the consumer to get the best possible service. Banking and finance sector suffered from this issue for the last few years, they started ignoring the welfare of the consumer.
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With the growth in digital technology, banking and finance sectors have also seen some turnarounds. Their work is increasingly becoming paperless and much more manageable. Services like Core Banking Services have boosted their activities and ease of procedures have meant less processing time for each service. This has improved their efficiency and reduced the errors that were once widespread. It has also given a reality check to them. There is an opportunity for them to come back harder and show their worth to the consumers. The quicker they learn, the lesser they will lose.