How Do Fintech Help Bank to Scale Up Their Businesses?
Even before the pandemicepidemic, investments in fintech startup enterprises increased to a staggering $112 billion from $51 billion in 2018. This is more than proof that financial service institutions must enter the digital age.
Many banks, for example, have launched their digital version for mobile users. This can lead to several questions, such as how fintech helps banking industry, how banks use fintech, and how fintech impacts other financial institutions. If you are one of the curious people asking the same questions, you are in the right place. Find the answers to those questions below!
5 Ways How Fintech Companies Help Traditional Bank
Chatbots for a better customer service
How fintech industry helps banks with the implementation of chatbots in their banking services? All banks now use chatbots on a regular basis since they not only cut costs and improve customer satisfaction but also free up call center workers to focus on value-added services. Since they speed up customer interactions, including processing inquiries and transferring clients to the appropriate departments, they are highly effective.
Additionally, chatbots can carry out various tasks. For instance, Bank of America's Erica chatbot can give customers investment advice.
More efficient payment system with online transaction
Fintech speeds up procedures that previously required days, weeks, or even months. Additionally, fintech could increase financial inclusion: fintech meets the requirements of the unbanked in various regions of the world when there is a lack of institutional or governmental assistance.
Customers can now avoid going to typical bank branches to apply for loans or mortgages. This technology eliminates the need for casual investors to meet face-to-face with financial specialists to review their portfolios' ins and outs carefully.
Branchless banking made possible
Seeing how banking applications are in great demand in the modern era of digital banking, we can see how fintech impacts banks. After all, the general public demands a user-friendly interface with access to the newest digital services.
According to a study, more than social media or weather applications, mobile banking is used by 31% of the 2,000 Americans polled. The demand is so great that 91% of customers would use their banking app rather than visit a branch in person.
AI (Artificial Intelligence) for faster transaction validation
Another answer to the question of how banks use fintech is with the advancement of AI. Banks used to manually back up fraud detection by a human investigation to see if a potentially fraudulent activity was true or false. Identifying the attacks is getting more complex as time goes on. They are getting more sophisticated, and banks need a lot of time and money to handle this manually.
Implementing machine learning-driven statistical modeling, data aggregation platforms, and process automation, according to global management consulting company McKinsey & Company, can completely revolutionize anti-money laundering operations by merely injecting new efficiencies.
APIs to provide better financial products
APIs are a great example of how fintech helps banks. Banks are now using APIs because this technology increases access to consumer data, creates new revenue sources, fosters future innovation, and many more. APIs also support new distribution channels.
By utilizing APIs, banks can also give their present and potential clients a richer, more compelling experience. This is especially true of the customers’ capacity to interact with diverse service providers effortlessly. Overall, more freedom, flexibility, and personalization provided by APIs enhance the consumer experience with better financial products.
Our personal and professional daily life probably involves a lot of fintech. According to Ernst & Young’s most recent Global FinTech Adoption Index, 64% of the world’s population used fintech applications in 2019, an increase from 16% in 2015. According to the research, three out of four consumers now use money transfer and payment services.
This shows that we cannot stop growing even in the middle of a global pandemic. That is precisely what Ayoconnect, the largest open finance platform in Southeast Asia, is trying to do. How fintech helps banks, how banks use fintech, and how fintech impacts banks can be seen through our mission to support SMEs in Indonesia since we aim to build a better and more inclusive digital financial world. Visit Ayoconnect now and see what we can do to help your business move forward!