Fintech has influenced both the banking, payments sector, but also the overall economic growth across many countries. Fintechs have harnessed the power of the internet, together with user-friendly smartphones to bring simplified access to financial services directly to the customer, with just the tap of a button. While fintech firms seem to be thinking like entrepreneurs, bankers are not.
In this article we delve into the rapid innovation happening in the fintech space and how this is affecting the banking and payments sector.
Banking-as-a-Service, often known as BaaS, is essentially a form of business model that allows non-banking businesses, in particular, to offer services that are typically associated with banks or other financial institutions. By using BaaS, non-banking businesses are able to provide financial services to their clients without first having to obtain a banking license.
Through the use of BaaS, almost every service provider has the ability to provide their consumers with white-label debit cards, a routable account, a store of value, and several other integrated financial solutions.
The incorporation of financial services is made easier with the help of embedded finance, which can be used for almost any kind of company. Embedded finance makes it possible to provide customers with easier access to financial services without having to divert them to a separate organisation. A company can give their customers access to the services they require, directly when they need them – by integrating financial services directly onto their website or mobile app using embedded finance.
While fintech has not yet replaced traditional finance, it has certainly resolved a number of issues that previously acted as a barrier of accessibility, especially in developing countries.
“The Traderoot Enterprise Platform provides the perfect base to quickly, simply, and cost-effectively build various fintech solutions,” said Daniel Templeman, Director at Traderoot.
Bankers Need to Adopt a Culture of Innovation
Fintechs have a culture of innovation, while bankers and banks do not. Traditional banks are often slow when it comes to innovation. Why? Because they already have a massive customer base.
Finches on the other hand are relatively small when compared to traditional banks and have a hunger for new growth. They listen to what consumers want and provide them with innovative banking solutions. Fintechs know that traditional banks and bankers are slow when it comes to innovation and they’re ready to take advantage of this. After all, they have to. Their business depends on the innovation they provide.
Bankers need to adopt a culture of innovation or face the risk of losing a large portion of their customer base to fintechs. Why banks may not feel the effects of slow innovation right now, they most certainly will in the coming years if they fail to adopt a culture of innovation.
Bankers need to become more agile, move faster and explore new technologies otherwise face the risk of being out-banked by modern fintech disruptors. Traderoot can enable bankers to stay ahead of their game by enabling that speed and agility they so desperately need.
The team at Traderoot are experts at designing and implementing new and complex solutions for both existing financial institutions and new fintech participants. For more information, take a look at our website or email us at email@example.com.