The banking needs of the modern era have evolved to a great degree. While the change has been brought about by the non-banking factors that are so important that difference seems inevitable. Most of these are technological changes which the banks have to adapt to stay updated with the advancement in the entire industry.
1) Financial institutions
The last couple of years have seen much progress regarding the advancement of every kind, for instance, a paper being replaced by plastic, diminishing queues, security being redefined altogether. Similarly, banks are also changing, and now many aspects of banking are shifting from your desktop to mobile. Now the customers need services which are customized according to their own needs. The industry now requires an instant reaction to address the demands of the customer. This pressure is so intense that there is a need to supersede others in the area of technology with efficiency. Although this is the need of the hour, it is raising immense doubts as to what should be the priority. Whether the banks should stick to its core function which is managing finance, or should the focus be on technological innovation? The situation is putting the banks in a very difficult position. If the focus remains on the change in technology, it might not be sustainable in the long-term and if on the other hand if they adhere to core functions only, it can result in industry-wide growth becoming stagnant.
Fintech is the new “in” trend of these times. It has helped to redefine the financial sector services in both neutral and subtle manner. Fintech focuses independently on the present and future demands of its customers along with the regulatory needs, all this being done through smooth integration in the existing infrastructure of the financial sector. All of this happening without calling for any drastic measures. It seems lucrative for the financial sector to adopt Fintech. However, the important aspect is, about the cost of introducing such technology concerning resources and efforts, and whether it will be beneficial in future. Thus, the question as to whether it is worth the time and effort.
3) Business focus
The focus of any business is not technology. It is one point where the question should be raised about whether it can, or it should focus on technology. Just keeping up to the mark with technological advancements can result in diversion from the actual line of business. This can leave the financial sector industry in a pretty dangerous situation if it focuses just on innovating through technology. Plus, it needs much investment as well as resources to manage and maintain an intensive business unit which must have its strategy, chain of command and workforce. Thus, shifting the focus towards rigorous technological advancements can result in losing business grounds despite the implementation of best in class technology.
4) Cost Reduction
Introducing technology has its price regarding material as well as managerial costs. The other costs which must be borne include the acquisition and implementation costs of technology which are increasing due to the inflation and other factors. So all this makes technological advancements less appealing. Besides that, it is also not easy to manage the intricacies of quickly progressing infrastructure. With each passing day, it is becoming quite difficult for the financial institutions to measure business results from technological advancements. This is because technological advancements require constant additions, enhancements, replacements, and negotiations with contractors.
All these problems can be resolved through a partnership with an online marketplace which will help to cut down such drastic costs. Moreover, this will help to achieve quality along with a wide range of services which can be offered to the customers. This is the biggest advantage of outsourcing along with many others.
It is also important to understand the fact that the focus of Fintech sector is to continuously evolve to provide better services with the passage of time. Thus, collaborating with an online marketplace will help to keep up with the technological innovation, without the need for replacing infrastructure to incorporate technological advancement. Moreover, if the partnership is with an established online portal which already has the right infrastructure to keep up with technological trends, it will provide cost benefits to the financial sector.
The visibility and reach of such platforms are tremendous. Although it will take some time to achieve but once achieved this will help the financial institutions to increase their reach in remote and unreachable areas.
5) Increasing customer outreach and managing needs
It is not possible for financial institutions to establish offices in remote locations. With the help of an online model, it is possible to cater to the banking demands of customers from those areas. Since it is a challenge at present to address the needs of customers hailing from remote areas. The introduction of smartphones has made connecting to these websites easier, and since smartphones have become so common it is easier to connect to such customers.
Through an online platform, it has also become easy to manage a paperless environment which makes it convenient to store relevant information, verify it and maintain the documentation. To achieve growth and sustainability, it is important to adopt a systematic and strategic approach to utilize technology along with keeping up with innovation. The basic idea is to minimize the expense and maximize ease. It is the need of the hour for Fintech and finance to collaborate to capitalize on the strengths of each other, to provide exceptional services to the customers.